TYCO INTERNATIONAL plc – ‘10-K’ for 12/31/96

As of:  Friday, 3/28/97   ·   For:  12/31/96   ·   Accession #:  950103-97-187   ·   File #:  1-13836

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                        140    582K 
 2: EX-10.17    Material Contract                                    179±   641K 
 3: EX-10.18    Material Contract                                     41±   157K 
 4: EX-10.19    Material Contract                                     16±    57K 
 5: EX-10.20    Material Contract                                     69±   234K 
 6: EX-10.21    Material Contract                                     57±   204K 
 7: EX-10.22    Material Contract                                      7±    25K 
 8: EX-10.23    Material Contract                                      7±    25K 
 9: EX-11.1     Statement re: Computation of Earnings Per Share        2±    10K 
10: EX-21.1     Subsidiaries of the Registrant                         7±    30K 
11: EX-23.1     Consent of Experts or Counsel                          1      7K 
12: EX-27       Financial Data Schedule (Pre-XBRL)                     1     10K 

10-K   —   Annual Report
Document Table of Contents

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FORM 10-K 

UNITED STATES     
SECURITIES AND EXCHANGE COMMISSION      
Washington, D.C. 20549      
_______________________     
FORM 10-K     

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE    
ACT OF 1934                                                             

For the fiscal year ended December 31, 1996 

OR  

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES         
EXCHANGE ACT OF 1934                                                    

Commission file number 0-16979  
------------------------------------------------------------------------------- 

ADT LIMITED 
(Exact Name of Registrant as Specified in its Charter)  

       BERMUDA                     Cedar House            Not Applicable
(Jurisdiction of Incorporation       41 Cedar Avenue        (I.R.S. Employer    
     or Organization)          Hamilton HM12, Bermuda    Identification No.)
         (Address of Principal
                                Executive Offices)*         Not Applicable
                                                              (Zip Code)

Registrant's telephone number, including area code 441-295-2244*   *See page 2  
------------------------------------------------------------------------------  

Securities Registered Pursuant to Section 12(b) of the Act:                     

Title of each class               Name of each exchange on which registered 
Common Shares, par value                                                    
$0.10 per share                New York Stock Exchange                
Series A First Preference                                                   
Share purchase rights          New York Stock Exchange                

Securities Registered Pursuant to Section 12(g) of the Act:  None               

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months (or for such shorter period that the        
registrant was required to file such reports), and (2) has been subject to      
such filing requirements for the past 90 days. YES [X]  NO [ ]                  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K is not contained herein, and will not be contained, to the    
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to     
this Form 10-K.[ ]                                                              

Based on the closing market price per Common Share of $26 7/8 on March 24,      
1997, the aggregate market value of the voting shares held by non               
affiliates of the registrant was $4,125.7 million.                              

At March 24, 1997, the number of shares outstanding of the registrant's Common  
Shares par value $0.10 per share was 156,696,447 shares.  A subsidiary of ADT   
Limited owns 3,182,787 Common Shares which are included in the number           
outstanding.                                                                    

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Table of Contents 

                                                    Page

PART I                                                                          
ITEM 1.   DESCRIPTION OF BUSINESS................................  1            
ITEM 2.   DESCRIPTION OF PROPERTIES.............................. 15            
ITEM 3.   LEGAL PROCEEDINGS...................................... 16            
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF                                    
SECURITY HOLDERS...................................... 18 

PART II                                                                         
ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY                                 
AND RELATED STOCKHOLDER MATTERS........................ 19  
ITEM 6.   SELECTED FINANCIAL DATA................................ 21            
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF                               
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......... 23  
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............ 34            
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH                                     
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..... 34  

PART III                                                                        
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..... 34            
ITEM 11.  EXECUTIVE COMPENSATION................................. 37            
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                   
AND MANAGEMENT......................................... 45  
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......... 47            

PART IV                                                                         
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES                               
AND REPORTS ON FORM 8-K................................ 47  
SIGNATURES............................................. 52  

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ADT LIMITED ANNUAL REPORT ON FORM 10-K                                          

The consolidated financial statements of ADT Limited (ADT Limited and its       
subsidiaries, where appropriate, is sometimes referred to hereinafter as "ADT"  
or the "Company") appearing in this Annual Report have been prepared in United  
States dollars ("US dollars" or "$") in accordance with generally accepted      
accounting principles in the United States.                                     

This Annual Report contains translations of certain amounts from various        
currencies into US dollars.  The translations of such foreign currencies into   
US dollars appearing in this Annual Report have been made in accordance with    
the principles set out in notes 2 and 3 of the notes to consolidated financial  
statements of the Company.                                                      

PART I                                                                          

ITEM 1. DESCRIPTION OF BUSINESS                                                 

INTRODUCTION                                                                    

ADT, through its subsidiaries, is engaged in two service businesses,            
electronic security services in North America and Europe and vehicle auction    
and related services in the United States.                                      

History of ADT Limited                                                          

ADT Limited was incorporated in Bermuda on September 28, 1984 under the name    
Hawley Group Limited.  In December 1984, as part of a corporate                 
reorganization, Hawley Group Limited became the parent company of the Hawley    
group of companies.  Prior to this reorganization, the parent company of the    
Hawley group of companies was Hawley Group PLC ("Hawley Group"), a company      
into which new management had been introduced in 1977, headed by Mr. M.A.       
Ashcroft, Chairman and Chief Executive Officer of ADT Limited.  At the time of  
the reorganization, the Hawley group of companies had a number of interests in  
service and other industries.  ADT Limited became a publicly traded company     
under the name Hawley Group Limited on December 24, 1984 when its common        
shares were listed for trading on the London Stock Exchange.  Prior to this     
date, the ordinary shares of Hawley Group had been listed on the London Stock   
Exchange.  Hawley Group Limited changed its name to ADT Limited in 1988 after   
its acquisition in 1987 of ADT, Inc.  (now named ADT Security Services, Inc.,   
hereinafter "ADT Security Services").  ADT Limited's businesses are conducted   
through its subsidiaries.                                                       

ADT Limited operates under the Companies Act, 1981 of Bermuda (as amended).     

Development of ADT's Electronic Security Services Business                      

The electronic security services division in North America principally          
consists of ADT Security Services, ADT Canada, Inc., Alert Centre, Inc.         
("Alert") and API Security, Inc., a subsidiary of Automated Security            
(Holdings) PLC ("ASH").  ADT built the core of its North American electronic    
security services business by acquiring Electro-Protective Corporation of       
America in 1981, the business of Crime Control, Inc., and ADT Security          
Services in 1987. Between 1982 and 1985, ADT also acquired several small        
security services businesses in North America.  The electronic security         
services division in Europe consists of ASH, principally doing business as      
Modern Security Systems Limited in the United Kingdom, and Electric Protection  
Services Limited doing business as ADT Security Systems in the United Kingdom   
("Electric Protection") and other subsidiaries doing business under the ADT     
name in continental Europe.  Electric Protection and the principal continental  
European subsidiaries were acquired as part of the acquisition of ADT Security  
Services in 1987.                                                               

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In 1990, ADT acquired Britannia Security Group PLC                              
("Britannia"), operating principally in the United Kingdom and, in the third    
quarter of 1996 merged with and acquired ASH, which provides electronic         
security services in the United Kingdom and North America. In the fourth        
quarter of 1995, ADT disposed of its electronic article surveillance business   
which was based in Europe and which was previously acquired as part of          
Britannia.  Alert, which provides electronic security services in the United    
States, was acquired in the fourth quarter of 1995.                             

Development of ADT's Vehicle Auction Business                                   

ADT's auction division was established in 1987 by the acquisition of The        
British Car Auction Group PLC ("BCA") which, at that time, had 14 auction       
centers in the United Kingdom and 12 auction centers in the United States.      
BCA was established in the United Kingdom in 1946 and, during the period from   
1946 to 1982, it expanded its vehicle auction business in the United Kingdom.   
In 1982, BCA entered the vehicle auction business in the United States by       
acquiring two vehicle auctions.  From 1982 to 1987, BCA acquired and            
constructed additional auction sites in both the United States and the United   
Kingdom.  Since 1987, the auction division has expanded its vehicle auction     
operations by the purchase of eight auction businesses and four auction         
centers in the United States, the development and construction of seven new     
auction centers and by internal growth.  In the fourth quarter of 1995, ADT     
disposed of its vehicle auction businesses in the United Kingdom and            
continental Europe, retaining a 10 per cent equity interest. In the United      
States, the auction division consists of ADT Automotive Holdings, Inc. and its  
subsidiaries (formerly Anglo American Auto Auctions).                           

Registered and Principal Executive Offices                                      

The registered and principal executive offices of ADT Limited are located at    
Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda.  The executive offices   
of the subsidiary which supervises ADT's North American activities are located  
in the United States at 1750 Clint Moore Road, PO Box 5035, Boca Raton, Florida 
33431.  The telephone number there is 561-988-3600.                             

BUSINESS DESCRIPTION                                                            

ADT, through its subsidiaries, is engaged in two service businesses,            
electronic security services in North America and Europe and vehicle auction    
and related services in the United States. In this business description, the    
term "ADT" is used to refer to the relevant operating subsidiary of ADT         
Limited engaged in that part of the business being described where the term     
appears.                                                                        

ADT's principal activities in the electronic security services business are     
the electronic monitoring and maintenance of its installed base of security     
systems and the installation of new, monitored security systems to add to its   
installed base.  Monitored systems may be sold or, as is most often the case,   
ADT may retain ownership of installed systems.  ADT receives contractual        
recurring fees for monitoring security systems through its electronic customer  
monitoring centers and for maintenance of security systems installed at         
customer premises and other related services.  ADT sells, installs and          
maintains monitored security systems, integrated electronic security systems    
and other electronic security products for additional fees. Annualized          
contractually recurring fees for electronic monitoring and maintenance of       
security systems installed at customer premises, and other related services,    
as of December 31, 1996, represented approximately 65 per cent of ADT's total   
electronic security services revenues in North America and Europe for 1996.     
The remainder of ADT's security revenues were derived from the outright sale    
and installation of security systems, the installation of security systems in   
accordance with monitoring service agreements and the maintenance of security   
systems on a non-contractual basis.                                             

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ADT's vehicle auction business operates a network of large modern auction       
centers in the United States which provide an organized wholesale marketplace   
for the sale and purchase of used vehicles.  Principal sellers, or consignors,  
include new and used vehicle dealers, vehicle manufacturers, fleet operators,   
leasing companies, financial institutions and government agencies.  Principal   
purchasers include franchise and non-franchise vehicle dealers and              
distributors who acquire vehicles to sell in the retail market.                 

The following table presents the proportion of revenues derived by ADT from     
electronic security services and vehicle auction services  in 1995 and 1996.    

                                                        [Enlarge/Download Table]
                                                                                         
                                           Proportion of total       Proportion of total 
                                       Electronic Security Services   Business Revenues  
                                                 Revenues                                
                                          1995               1996    1995            1996
Electronic Security Services                                                             
North America                              71%                75%    54%             62% 
United Kingdom and Continental Europe      29%                25%    22%             20% 
                                       Proportion of total Vehicle                       
                                        Auction Services Revenues                        
Vehicle Auction Services                                                                 
United States                              62%               100%    15%             18% 
United Kingdom and Continental Europe      38%                  *     9%               * 

* ADT's vehicle auction services businesses in the United Kingdom and           
continental Europe were disposed of in the fourth quarter of 1995.              

Electronic Security Services                                                    

The Industry                                                                    

The security services industry encompasses a wide range of products and         
services, which can be broadly divided into electronic security products and    
services and highly labor intensive manned guarding and patrol services.        
ADT's electronic security services division competes primarily in the           
comparatively capital intensive electronic monitoring security services sector  
of the industry.  Electronic security products and services consist of the      
sale, installation, continuous monitoring and maintenance of electronic         
security systems for commercial and residential use.  This business utilizes    
modern electronic devices installed in customers' businesses and residences to  
provide detection of events, such as intrusion or fire, surveillance and        
control of access or articles.  Event detection devices may be monitored by     
monitoring centers, such as ADT's customer monitoring centers, which are        
linked to the customer through telephone lines.  These centers are often        
located at remote distances from the customer's premises.  In some instances,   
the customer may monitor these devices at its own premises or the devices may   
be connected to local fire or police departments.  The products and services    
marketed in the electronic security services industry range from residential    
systems that provide basic entry and fire protection to sophisticated           
commercial systems incorporating closed circuit television systems and access   
control.                                                                        

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The development of centrally monitored alarm systems began at the turn of the   
century and, historically, these systems were considered a relatively           
expensive form of security and were purchased primarily by businesses and       
affluent individuals.  The industry continued to evolve as telephone networks   
spread and technology advanced.  Progress continued steadily until the early    
1970's when computer technology and semi-conductor components began to be       
incorporated into monitoring systems.  Since then, the development of           
telecommunications technology and its application in security systems has       
accelerated, and technological advances have increased the availability of      
lower cost, sophisticated electronics.  These advances have enabled the         
industry to access a wider market by providing a broader range of monitored     
security services at a variety of price levels.  Concurrently with these        
technological advances, demand for security systems has grown with the          
increase in the general awareness of security issues and rising crime rates.    
Customers also purchase security systems due to the practice in the insurance   
industry of reducing premiums for customers who have a security system          
installed, or requiring the installation of a security system as a condition    
of coverage.                                                                    

STAT Resources, Inc., an independent market research firm ("STAT Resources"),   
estimates that total United States commercial electronic security systems and   
services market revenues and total residential electronic security systems and  
services market revenues were approximately $8.0 billion and $5.0 billion,      
respectively in 1996.  ADT accounted for approximately 7.7 per cent and 7.5     
per cent of these amounts, respectively.  Although a certain amount of          
industry consolidation has taken place, the industry in North America remains   
highly fragmented and STAT Resources estimates that there were approximately    
13,000 companies in the United States electronic security systems and services  
market in 1996. The electronic security services industry in Europe is also     
highly fragmented.                                                              

Business Strategy                                                               

ADT[Registered] is a leading name in electronic security services, and ADT      
believes that its name is important in the marketing of its security services   
and in competing with other electronic security service providers.  Before      
1987, ADT's electronic security services business served predominantly          
commercial customers.  Since 1987, ADT's goals have been to create a lower      
cost, more efficient operation, suitable for long-term growth and greater       
profitability, and to take advantage of the economies of scale resulting from   
increased utilization of its infrastructure.  Since 1987, ADT has (i) reduced   
the number of central stations and equipped its  customer monitoring centers    
with enhanced computer technology to further automate the monitoring process    
and thus provide increased monitoring capacity, (ii) modernized and             
streamlined its computer-based administration and control systems, (iii)        
enhanced customer service programs through improved training programs for       
sales, management, installation and service employees and (iv) intensively      
marketed electronic monitoring services to residential customers to take        
greater advantage of the increased monitoring capacity created by the           
monitoring center consolidation and modernization program.                      

Between 1987 and 1993, ADT significantly reduced the number of its central      
stations from 162 to 30 in North America and Europe while increasing            
monitoring capacity and maintaining geographical coverage. Since then ADT has   
continued to pursue its strategy of central station consolidation, although     
closures have taken place at a slower rate. Further opportunities for central   
station consolidation now exist following the acquisition of ASH. In the first  
quarter of 1997, ADT announced that it was investing in planned enhancements    
to its technological infrastructure to facilitate a further consolidation of    
its monitoring center network in order to provide for future anticipated growth 
opportunities while lowering costs and increasing monitoring capacity and       
operating efficiency.                                                           

As a result of ADT's program implemented in 1988 to target the residential      
sector in North America, as well as growth in the level of consumer concern     
over crime and security generally and the availability of lower priced          
systems, ADT has significantly expanded its residential customer base in North  
America.  Since 1988, ADT has enjoyed an annual compound growth rate in         
residential unit sales in excess of 36 per cent. ADT believes that because of   
the success of its sales and marketing efforts since 1988, it is uniquely       
positioned to benefit from the range of technological developments that are     
expanding and diversifying the types of services  that ADT is able to offer.    

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During the past several years, ADT's business has been evolving from that of    
primarily an intrusion alarm company into a data information company. ADT has,  
in the past few years, been offering energy management products and services    
to regulate the temperature and lighting in a customer's premises. This         
service has been achieved through the use of a communication protocol which     
utilizes the premises' existing alternating-current wiring. Another creative    
use of new technologies has permitted the launch of CarCop[Registered] which    
combines three significant infrastructures, cellular communications, the        
global positioning satellite system and ADT's 24 hour monitoring services, to   
provide a revolutionary new personal protection and vehicle security service.   

ADT believes that its broad customer base, its unique national distribution     
system and its highly skilled workforce provide it with a strong capacity to    
exploit new technologies and, given the rapid pace of technological change, ADT 
anticipates that it will explore partnering opportunities with premier          
companies in a variety of industries.                                           

ADT's overall goal is to expand its customer base in both the commercial and    
residential sectors.  The commercial sectors in North America, the United       
Kingdom and continental Europe represent well established markets with growth   
prospects closely related to the overall economic growth in these markets.      
ADT's strategy is to retain a high percentage of its existing commercial and    
residential customers by continuing to provide high quality service.  As part   
of its strategy to maintain and enhance its commercial market position in       
North America, ADT has a national accounts sales team in place in the United    
States to serve customers that have multiple locations.  ADT believes that the  
North American residential marketplace continues to represent a relatively      
unpenetrated market and ADT's strategy is to continue to market and install     
large numbers of new residential security systems, primarily in this market.    
ADT is continuing to implement this strategy through intensive advertising and  
marketing in metropolitan areas.  ADT believes that incremental monitoring      
revenues from new customers should enhance operating margins because            
additional customers can  be served through ADT's existing monitoring           
facilities with very little impact on ADT's total operating costs associated    
with monitoring security systems. ADT, however, incurs  marketing costs         
associated with the sale of new systems and incremental installation costs in   
respect of each new system sold which are partly offset by a fee charged to     
the customer on installation of the system. In the first quarter of 1997,  ADT  
announced that it was investing in planned enhancements to its technological    
infrastructure to facilitate monitoring center consolidation and provide        
increased capacity for future anticipated growth opportunities.                 

Consistent with its strategy, ADT acquired Alert in the fourth quarter of 1995  
and merged with ASH in the third quarter of 1996 adding, in aggregate, over     
375,000 customers to ADT's customer base.  The acquisition of Alert also        
provided ADT with an established dealer program under which security systems    
are installed by third parties with the monitoring contracts being onsold to    
ADT for monitoring.  Such a program represents a cost effective way for ADT to  
further enhance its operating leverage. The acquisition of ASH gave ADT         
leadership in the electronic security services sector in the United Kingdom     
and will provide ADT with a new marketing opportunity in the UK residential     
market place.                                                                   

The following table presents the approximate number of commercial and           
residential customers in North America and Europe contracting with ADT for the  
monitoring or maintenance of electronic security systems, together with the     
aggregate annualized service revenue under contract, as of December 31, 1996,   
and the annual combined discontinuance rate for commercial and residential      
contracts in respect of 1996.                                                   

                                                                [Download Table]
                                                                                    
Number of Commercial  Number of Residential  Annualized Service    Annual Combined  
     Customers              Customers             Revenue        Discontinuance Rate
       672,000              1,149,000              $920m                10.4%       

Annualized service revenue and annual combined discontinuance rate are defined  
under "Management's Discussion and Analysis of Financial Condition and Results  
of Operations - Results of Operations-Electronic Security Services".            

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Commercial                                                                      

ADT provides electronic security services and products to financial             
institutions, industrial and commercial businesses and complexes, warehouses,   
facilities of federal, state and local government departments, defense          
installations, and health care and educational facilities.  ADT conducts its    
commercial operations in the United States, Canada, the United Kingdom, Spain,  
France, Belgium, Greece, The Netherlands and the Republic of Ireland.  ADT      
sells, installs, monitors and maintains electronic security systems and         
products located at its customers' premises.  These systems and products are    
tailored to customers' specific needs and include electronic monitoring         
services that provide intrusion and fire detection, as well as card or keypad   
activated access control systems and closed circuit television systems.  ADT    
also markets standard security packages for specific types of commercial        
customers, such as retailers and banks.  Certain commercial customers require   
more complex electronic security systems.  To meet this demand, ADT also sells  
integrated electronic security systems that combine a variety of electronic     
security services and products.  These systems are integrated by ADT to         
provide a single computer controlled security system.  Integrated security      
systems are typically owned by the customer and can range in price from a few   
thousand to several million dollars.  Integrated security systems may be        
monitored by the customer at its premises or connected to an ADT monitoring     
center.  In either case, ADT usually provides support and maintenance for these 
systems through service contracts.                                              

The systems installed at commercial customers' premises may be owned by ADT     
or, as in the case of most integrated systems, by the customer.  When the       
system is sold, the customer pays ADT the purchase price upon installation and  
the customer also pays an installation fee.  When monitoring equipment is       
owned by ADT, as is most often the case, only an installation fee is charged.   
Most customers also agree to pay an annual service charge for monitoring and    
maintenance.  Some customers elect to pay for maintenance on a per visit        
basis.  Service contracts for integrated security systems are negotiated on an  
individual basis.  For integrated systems, a separate fee is charged for        
systems integration and installation.  Service contracts are negotiated on an   
individual basis depending upon the number of systems monitored, the type of    
alarm transmission and the level of response services required.                 

STAT Resources estimates that total United States commercial electronic         
security systems and services market revenues were approximately $8.0 billion   
in 1996.  ADT accounted for approximately 7.7 per cent of this amount.          

Commercial customers are motivated to purchase security systems to protect      
their property, employees and customers and by their insurance carriers which   
may offer lower premium rates if a security system is installed or require      
that a system be installed as a condition to coverage.  Of those insurance      
carriers in North America which offer lower premiums or will provide coverage   
only to customers with centrally monitored alarm systems, most require the      
monitoring center to be approved by Underwriters Laboratories, Inc.  ("UL").    
UL requires each monitoring center to meet specified design, technical and      
operational standards, including back up power capability.  UL confirms         
compliance with its specifications through periodic on-site inspections.  All   
of ADT's customer monitoring centers in the United States are UL approved.      

As of December 31, 1996, approximately 478,000 commercial customers, some of    
which have multiple locations, were under contract in North America,            
approximately 153,000 were under contract in the United Kingdom and             
approximately 41,000 were under contract in continental Europe.  The            
electronic security services business in Europe services primarily commercial   
customers.  In 1996, approximately 68 per cent of ADT's total electronic        
security services revenues in North America and Europe were derived from        
commercial customers.  The electronic security services division is not         
dependent upon any single customer, as the revenue from any one customer does   
not exceed one per cent of the division's total net revenues.                   

Contracts with commercial customers for monitoring and maintenance services     
are usually for an initial five-year term, automatically renewing on a          
year-to-year basis thereafter, unless canceled.  A substantial number of        
contracts are now beyond their initial term and are therefore on an automatic   
renewal basis.  It has been ADT's experience that monitoring contracts for      
security systems are generally renewed upon their expiration.  Contract         
discontinuances, however, do occur, principally as a result of customer         
relocation or closure.                                                          

ADT markets its electronic security services to commercial customers through a  
direct sales force in North America and Europe and through direct mail and      
print advertising.  Customers which have multiple locations in North America    
are serviced by a separate national accounts sales force.                       

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Residential                                                                     

Residential electronic security services are primarily marketed to customers    
in North America and consist of the sale, installation, monitoring and          
maintenance of electronically monitored security systems to detect intrusion    
and fire.  Residential customer service and monitoring are performed from the   
same facilities as those used for commercial accounts.                          

STAT Resources estimates that total United States residential electronic        
security systems and services market revenues were approximately $5.0 billion   
in 1996.  ADT accounted for approximately 7.5 per cent of this amount.          

As part of its business strategy, ADT began to intensively market monitored     
security systems to residential customers in North America in 1988 and ADT      
believes that it has been able to sell a large number of residential security   
systems due to the growing level of consumer concern over crime and security    
generally and the availability of lower priced systems.  In addition,           
residential customers are usually able to obtain more favorable insurance rates 
if an electronically monitored security system is installed in their home.      
ADT targets two groups of residential customers, those who typically require    
relatively inexpensive, standard electronically monitored security systems and  
a smaller group of residential customers who require more sophisticated         
systems.                                                                        

In 1996, ADT contracted to install and monitor approximately 280,000 new        
residential security systems, principally in North America,  and as of          
December 31, 1996, ADT had approximately 1,149,000 residential customers under  
contract for monitoring services, of which approximately 90 per cent were       
located in North America.  In 1996, approximately 32 per cent of ADT's total    
electronic security services revenues in North America and Europe were derived  
from residential customers.  On average, fees charged by ADT for residential    
monitoring services are lower than the fees charged for commercial monitoring   
services.  Contracts for residential services entered into after 1990 have      
usually been for an initial three-year term, automatically renewing on a        
year-to-year basis thereafter, unless canceled.  For contracts entered into     
after April 1992, automatic renewal has been for two-year terms, unless         
canceled.  A substantial number of contracts are now beyond their initial term  
and are therefore on an automatic renewal basis.  It has been ADT's experience  
that residential contracts are generally renewed upon their expiration.         
Contract discontinuances, however, do occur, principally as a result of         
customers relocating.                                                           

In North America, ADT usually retains ownership of standard residential         
systems whereas the more sophisticated systems are usually purchased by the     
customer.  When the system is sold, the customer pays ADT the purchase price    
upon installation and the customer also pays an installation fee.  When the     
system is owned by ADT, as is most often the case, only an installation fee is  
charged.  Substantially all residential customers agree to pay an annual        
service charge for monitoring and may also subscribe for maintenance services.  
Uniform package prices are offered to residential customers who purchase ADT's  
standard residential security system which includes a fixed number of           
detection devices.  Frequently, customers add detection devices to expand the   
coverage of the system for which ADT charges an additional installation fee     
and an additional sales charge if the system is purchased.  Pricing for         
residential customers who require more sophisticated systems depends upon the   
monitoring components installed, the type of alarm transmission and other       
services required.                                                              

ADT markets its electronic security services to residential customers through   
television and radio advertising, print advertising, telemarketing, direct      
mail and through a direct residential sales force as well as through            
approximately 120 independent ADT authorized dealers and through third party    
affinity marketing arrangements.                                                

Installation, Service and Maintenance                                           

As part of its effort to provide high quality service to its commercial and     
residential customers, ADT maintains a trained installation, service and        
maintenance force of in North America and Europe. These employees are trained   
by ADT to install and service the various types of commercial and residential   
security systems which are marketed by ADT.  ADT also uses sub-contracted       
personnel where appropriate.                                                    

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Product Sourcing                                                                

ADT does not manufacture any of the components used in its electronic security  
services business, although it does provide its own specifications to           
manufacturers for certain security system components and undertakes some final  
assembly work in respect of more sophisticated systems.  Due to the general     
availability of the components used in its electronic security services         
business, ADT believes that it is not consistent with its role as a services    
company to be involved in manufacturing.  This policy allows ADT to obtain the  
components of its systems from a number of different sources and, by so doing,  
to supply its customers with the latest technology generally available in the   
industry.  ADT is not dependent on any single source for its supplies and       
components and has not experienced any material shortages of components.        

Monitored Electronic Security Systems                                           

ADT's electronically monitored security systems involve the use on a            
customer's premises of devices designed to detect or react to various           
occurrences or conditions, such as intrusions, movement, fire, smoke, flooding, 
environmental conditions (including temperature or humidity variations),        
industrial operations (such as water, gas or steam pressure and process flow    
controls) and other hazards.  In most systems, these detection devices are      
connected to a microprocessor based control panel which communicates through    
telephone lines to an ADT monitoring center where alarm and supervisory         
signals are received and recorded.  Systems may also incorporate an emergency   
"panic button", which when pushed causes the control panel to transmit an       
alarm signal that takes priority over other alarm signals.  In most systems,    
control panels can identify the nature of the alarm and the areas within a      
building where the sensor was activated and transmit the information to an ADT  
customer monitoring center.  Depending upon the type of service for which the   
subscriber has contracted, monitoring center personnel respond to alarms by     
relaying appropriate information to the local fire or police departments,       
notifying the customer or taking other appropriate action, such as dispatching  
employees to the customer's premises.                                           

In most systems, the control panel communicates with an ADT customer            
monitoring center through one of four telephone line transmission systems,      
direct wire, multiplex, digital communicator or derived channel.  Direct wire   
and multiplex systems are used mainly for commercial customers who require a    
higher level of security, whereas digital communicator or derived channel       
systems are used primarily in systems where cost is more important.  Direct     
wire transmission uses a dedicated leased telephone line and is the most        
expensive form of monitoring connection.  The multiplex system uses a remote    
device to receive signals from multiple customers' premises and concentrate     
and retransmit them over a dedicated leased telephone line to an ADT customer   
monitoring center.  These two transmission methods allow ADT to continuously    
monitor the customer's security system to confirm that the connection to the    
monitoring center is functioning properly.  The multiplex system provides the   
same level of security as direct wire but is less costly due to the reduced     
number of dedicated telephone lines which are necessary to monitor the same     
number of customers.  ADT has a continuing selective conversion program to      
replace direct wire transmission systems with lower cost multiplex or digital   
systems.  These conversions typically replace older equipment and result in a   
reduction in telephone line costs and in the frequency of customer service      
calls.                                                                          

A security system which utilizes a digital communicator responds to an event    
by dialing the monitoring center through the customer's regular telephone       
line.  Unlike multiplex and direct wire systems, these systems are not          
continuously monitored, and if a control panel or the telephone line is not     
functioning properly the monitoring center may not be alerted.  The derived     
channel system, which is not available in all markets, ties into the existing   
regular telephone line network but allows parallel simultaneous communication   
on one line using separate distinct frequencies.  Using the derived channel     
system, it is possible to continuously monitor a digital communicator           
connection over the customer's regular telephone line.  In certain markets ADT  
also offers systems with backup transmission capability through radio           
frequency transmission or the local cellular telephone network.                 

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Other Security Businesses                                                       

ADT entered the mobile security services market in 1996 with the launch of      
CarCop[Registered], a vehicle security system introduced in the fourth quarter  
of 1996 in conjunction with Mobile Security Communications, Inc. which is       
responsible for the sale and installation of the CarCop product. CarCop         
combines ADT's 24 hour monitoring services with cellular communications         
technology and the Global Positioning Satellite system to provide constant      
security coverage for a vehicle and its occupants whether the vehicle is        
parked, unattended or in use. The system can detect a range of emergency        
situations and, through utilizing ADT's 24 hour monitoring services and         
employing satellite tracking technology, the appropriate assistance can be      
despatched to the vehicle's exact location at any time, day or night.           

Competition                                                                     

The electronic security services business in North America is highly            
competitive.  New competitors, who have not necessarily had any previous        
involvement in the provision of electronic security services, are continually   
entering the field.  Competition is based primarily on price in relation to     
quality of service.  ADT believes that the quality of its services is higher    
than that of many of its competitors.  Accordingly, ADT's prices may therefore  
be higher than those charged by many of its competitors.  Sources of            
competition in the security services business are other providers of central    
monitoring services, systems directly connected to police and fire              
departments, local alarm systems and other methods of protection, such as       
manned guarding.  ADT believes the number of local police and fire departments  
that perform monitoring has been declining for some years.                      

The central monitoring sector of the electronic security services business is   
characterized by high fixed costs but has low marginal costs associated with    
monitoring additional customers.  Opportunities exist within the industry  to   
achieve economies of scale by consolidation of monitoring and administrative    
functions and a certain amount of industry consolidation is currently taking    
place. The industry in both North America and Europe, however, remains highly   
fragmented.  ADT believes that it services more customers through its customer  
monitoring centers in North America than any other company.  Individual         
competitors, however, may service more customers in a given local market.       

ADT competes with other major firms in North America, which have substantial    
financial resources, including Ameritech Corporation (operating under the       
SecurityLink from Ameritech[Registered] brand name);  Borg-Warner Security      
Corporation (operating under the Wells Fargo[Registered] and Pony               
Express[Registered] brand names); the Honeywell Protection Services division    
of Honeywell, Inc.; the Brink's Home Security division of The Pittston          
Company; and approximately 13,000 smaller regional and local companies.  ADT    
also competes with several national companies and several thousand regional     
and local companies in the United Kingdom and continental Europe.               

In February 1996, a federal telecommunications reform bill was enacted which    
contained provisions specific to the electronic security services industry.     
Ameritech Corporation was prohibited from acquiring additional equity or        
financial interests in alarm monitoring companies for five years from the date  
of enactment of the law and the other regional Bell operating companies are     
barred from acquiring more than a 10 per cent equity interest in alarm          
monitoring companies or otherwise entering the business for five years from     
the same date.                                                                  
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Regulation                                                                      

ADT's operations are subject to a variety of federal, state, county and         
municipal laws, regulations and licensing requirements in the United States     
and national and local government laws, regulations and licensing requirements  
in countries outside the United States.  Many of the states and countries in    
which ADT operates, as well as certain local authorities, require ADT to        
obtain licenses or permits to conduct its security services business.  Certain  
governmental entities also require persons engaged in the alarm business to be  
licensed and to meet certain standards in the selection and training of         
employees and in the conduct of business.  ADT believes that it is in           
substantial compliance with all such licensing and regulatory requirements in   
each jurisdiction in which it operates.  In addition, there has been a trend    
recently on the part of municipalities and other localities to attempt to       
reduce the level of false alarms through various measures such as the           
licensing of individual alarm systems and the imposition of fines upon          
customers, revocation of licenses or non-response to alarms after a certain     
number of false alarms.  While such statutes and ordinances have not had a      
material adverse affect on ADT's business operations to date, ADT is unable     
to predict whether such statutes or ordinances, or any similar statutes or      
ordinances enacted by other jurisdictions, will adversely affect ADT's          
business and operations in the future.  The alarm industry is also subject to   
the oversight and requirements of various insurance, approval, listing and      
standards organizations.  Adherence to the standards and requirements of such   
organizations may be mandatory or voluntary depending upon the type of          
customer served, the nature of security service provided and the requirements   
of the local governmental jurisdiction.  ADT has not had any material           
difficulties in complying with such standards and requirements in the past.     

ADT's electronic security business relies upon the use of telephone lines to    
transmit signals, and the cost of such lines and the type of equipment which    
may be utilized are currently regulated by both the federal and state           
governments in the United States and national and local governments in other    
countries.                                                                      

Risk Management                                                                 

The nature of the services provided by ADT potentially exposes it to greater    
risks of liability for employee acts or omissions or product liability than     
may be inherent in many other service businesses.  To attempt to reduce this    
risk, ADT's electronic security service contracts contain provisions limiting   
its liability and requiring indemnification by its customers.  ADT also         
carries insurance of various types, including general liability and errors and  
omissions insurance, to protect it from product defects and negligent acts of   
its employees.  ADT obtains such insurance at rates and upon terms negotiated   
periodically with various underwriters.  The loss experience of ADT and, to     
some extent, other security services companies, may affect premium rates        
charged to ADT.  As of December 31, 1996 such policies provided that ADT        
retain liability for the first $1.0 million per occurrence.  Certain of ADT's   
insurance policies and the laws of some states may limit or prohibit insurance  
coverage for punitive or certain other kinds of damages arising from employee   
misconduct.  In addition, in some states ADT's limitation of liability clause   
may be ineffective in cases of gross negligence and in certain other            
situations.                                                                     

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Patents and Trademarks                                                          

ADT Security Services holds approximately 40 active patents worldwide and has   
several pending patent applications.  No patents are due to expire in the near  
future that would materially affect the operations of ADT's electronic          
security services business.  The ADT[Registered] trademark and service mark     
are important to ADT's electronic security business.  ADT Security Services     
uses several other trademarks and service marks in marketing its products and   
services,including Focus[Registered], Centrascan[Registered],                   
Safewatch[Registered] and Customer Link[Registered] .  ADT believes that the    
rights in these trademarks and service marks, including Focus, Centrascan,      
Safewatch and the ADT trademark are adequately protected.                       

Employees                                                                       

As of December 31, 1996, the electronic security services division had          
approximately 16,000 employees,  of whom approximately 12,000 were based in     
North America and approximately 4,000 were based in Europe.  The majority of    
these employees are not represented by unions or covered by collective          
bargaining agreements.  ADT believes its relations with employees and their     
unions are generally good.                                                      

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Vehicle Auction Services                                                        

The Industry                                                                    

Vehicle auctions constitute a principal channel of distribution and             
redistribution for used vehicles.  An auction brings together, in one           
location, dealers seeking to restock and diversify their inventory of used      
cars with a high volume of various makes and models provided by sellers         
seeking to dispose of their vehicles.  The vehicle auction industry provides a  
reliable marketplace where many dealers participate in the auction's bid        
process and thus establish true wholesale prices for used vehicles. Vehicle     
auctions are preferred by many dealers, financial institutions and other        
sellers because an auction provides an efficient, cost-effective and            
convenient method of vehicle resale at the prevailing market price.             

The principal sources of vehicles for sale through auctions are consignments    
by new and used vehicle dealers, vehicle manufacturers, corporate owners of     
vehicles such as fleet operators, daily rental companies, leasing companies,    
banks and other financial institutions, manufacturers' credit subsidiaries and  
government agencies.  The vehicles consigned by dealers include vehicles of     
all types and ages and include vehicles that have been traded in against new    
car sales.  Vehicles consigned by corporate and financial owners include both   
repossessed and off-lease vehicles and, as a result, are normally in the range  
of one to four years old. The principal purchasers of vehicles at ADT's         
auctions are new and used vehicle dealers and distributors.                     

ADT believes that the consignment of vehicles from dealers is the foundation    
of the auction industry. Dealers rely on the sale of used vehicles for a        
significant proportion of their profits and are both buyers and sellers at      
auction.                                                                        

A significant number of vehicles sold at auction in recent years has been       
attributable to vehicles being disposed of by domestic and import               
manufacturers who contract with certain auctions to sell used vehicles on       
their behalf. In the late 1980's, vehicle manufacturers found it advantageous   
to produce more vehicles than were necessary to satisfy immediate retail        
demand.  These vehicles were either sold to daily rental car companies with a   
guarantee by such manufacturers to repurchase the vehicles or were leased to    
the daily rental car companies ("Program Cars").  Upon repurchase, the vehicle  
manufacturers chose to remarket these late-model cars to their dealers          
primarily through the vehicle auction network.  Program Car auctions are        
restricted to each manufacturer's franchised dealers with the exception of      
auctions for some small volume import manufacturers.  According to industry     
sources, the number of vehicles coming to auction from this source reached a    
peak of 1.6 million units in 1991. As the industry came out of recession in     
1992, volumes reduced and have stabilized at around 1.1 million vehicles per    
year. When the number of cars available to daily rental companies through       
manufacturers' guaranteed repurchase programs was at its peak, many of the top  
rental companies obtained large numbers of their vehicles through such          
programs. As manufacturers have reduced their buy back programs , the daily     
rental companies have been obliged to purchase more vehicles in their own       
names and, consequently, their need  to remarket vehicles at the end of their   
life cycle has increased.                                                       

Vehicles owned by corporations and financial institutions represent another     
major source of vehicles for sale at auction and include vehicles owned by      
daily rental companies, vehicles from company fleets, end of term or early      
termination vehicles from leasing companies, including manufacturers' finance   
subsidiaries, vehicles from finance companies, including repossessed vehicles,  
and vehicles from the public sector. The dynamics of this segment are           
changing, particularly as the trend towards leasing new vehicles by             
individuals under manufacturers' lease programs increases.                      

ADT Auctions                                                                    

As of December 31, 1996, ADT operated 27 vehicle auction centers in the United  
States where it is the second largest provider of vehicle auction services.     
In 1996 the aggregate value of vehicles sold through ADT auction centers was    
approximately $8.7 billion.  Substantially all of the vehicles sold at ADT      
auction centers are passenger cars and light trucks with the balance            
consisting of heavy trucks and industrial vehicles.                             

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The following table presents the approximate number of vehicles entered and     
sold through all of ADT's vehicle auction centers in the United States during   
1994, 1995 and 1996.                                                            

                    1994           1995           1996
Vehicles Entered            1,660,000      1,798,000      1,881,000             
Vehicles Sold                 967,000        994,000      1,064,000             

Business Strategy                                                               

ADT has been a leader in developing the wholesale vehicle auction business in   
the United States.  ADT aims to provide a wholesale redistribution system for   
used vehicles which is efficient, economical and reliable.  ADT's specific      
strategies are (i) to maintain and further strengthen its current               
relationships with vehicle manufacturers, fleet/lease operators, daily rental   
companies  and other significant vehicle suppliers and dealers that both supply 
vehicles for auction and purchase vehicles at auction and (ii) to increase      
ADT's share of total used vehicle transactions.  ADT is pursuing these          
strategies in part by encouraging more vehicle dealers to attend its auctions.  

Where possible, ADT categorizes its auction sales in order to facilitate the    
matching of appropriate buyers with vehicles being offered for sale.  Auctions  
may be categorized by the type of vehicle being sold or by age of vehicle,      
mileage or source, for example ex-rental vehicles.  ADT maintains a record of   
dealers that are authorized to bid at its auctions and employs direct           
marketing techniques to target dealers who are known buyers for the category of 
vehicle being auctioned and who are registered with ADT as approved buyers.     
ADT also holds closed sales for manufacturers' vehicles, including Program      
Cars and fleet vehicles, restricted to dealers holding a franchise from that    
particular manufacturer.                                                        

ADT keeps its site location strategy and real estate requirements under         
continuous review together with the potential benefits of expanding its         
network through the acquisition of vehicle auction businesses and the           
development of new auction centers.  ADT however believes that the geographic   
coverage of its auction network in the United States is substantially           
complete.                                                                       

Auction Operations                                                              

ADT operates a network of large modern auction centers and provides a           
comprehensive range of vehicle redistribution services.  These services         
include collection and transportation of a seller's vehicles to an auction      
center, reconditioning the vehicles to retail standards, matching the vehicles  
with the auction market most likely to generate the highest amount of sale      
proceeds and delivering the vehicles to the buyer.  Separate fees are charged   
for each of these services.  ADT acts solely as an agent in auction             
transactions and does not purchase vehicles for its own account.  ADT           
repurchases a small number of vehicles under its buyer protection programs      
which require it to repurchase vehicles that have suffered odometer tampering   
or that have an undisclosed salvage history.  See "Vehicle Auction              
Services-Services and Fees-Insurance." ADT operates almost exclusively in the   
wholesale marketplace.  In general, the public is not permitted to attend       
auctions.                                                                       

When a vehicle arrives at an ADT auction center, it is checked in and assigned  
a computer tracking number.  A seller may instruct ADT to perform various       
services including vehicle appraisal, appearance reconditioning and paint or    
body work to prepare the vehicle for auction.  The title is checked against a   
computer database held by ADT.  If a salvage history appears, the seller must   
either disclose the damage or withdraw the vehicle from the auction.  ADT       
completes all requested services and holds the vehicles in secure parking       
areas until the scheduled auction day.  The auction centers use computerized    
control systems to track vehicles through each step of the auction process.     
ADT is responsible for the vehicles while they are under its control.           

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Generally, ADT's auction centers hold regularly scheduled auctions for          
vehicles from specific market sources.  Additional auctions are scheduled as    
necessary, including auctions for specific types or categories of vehicles,     
such as heavy trucks, municipal and agricultural equipment and classic cars. A  
typical auction center consists of an auction hall, large paved areas for the   
storage of vehicles, facilities for reconditioning and separate areas for       
parking vehicles immediately prior to auction, some of which are covered.       
Auction halls typically have a number of lanes through which vehicles are       
normally driven, and where the auction bidding process takes place. This is a   
continuous process that enables a large number of vehicles to be auctioned      
quickly and efficiently.  The auction hall building also contains the cashiers  
and other administrative personnel, as well as cafeteria and other customer     
facilities.  When a vehicle is sold, the paperwork associated with a sale,      
including conveyance instruments, title or title applications and tag           
applications, is generally processed within one hour of the sale and immediate  
delivery arrangements are made.  A particular vehicle may pass through the      
auction system more than once prior to being sold to a new owner.               

ADT is responsible for payment to sellers upon presentation of title after a    
vehicle is sold.  If purchases are made other than on a cash basis, ADT         
determines in advance the credit-worthiness of the buyer.  It is customary for  
buyers at ADT's auctions to pay by banker's draft.  The auction collects funds  
on drafts within an average of ten working days.  ADT's bad debt experience on  
these transactions is negligible.                                               

Sources of Vehicles                                                             

The principal sources of vehicles for sale at ADT's auctions are consignments   
by new and used vehicle dealers, vehicle manufacturers, corporate owners such   
as fleet operators, daily rental companies, leasing companies, banks and other  
financial institutions, manufacturers' credit subsidiaries and government       
agencies.                                                                       

The supply of consignment vehicles from dealers is relatively constant          
throughout the year.  The number of Program Cars and vehicles consigned to      
auction by corporate fleet owners may fluctuate considerably throughout the     
year.  As a consequence, auction revenues may fluctuate from quarter to         
quarter and at certain times during the year ADT may be storing large numbers   
of vehicles awaiting auction.                                                   

ADT contracts with vehicle manufacturers for the auction of Program Cars.       
These contracts, which do not require the manufacturers to sell any minimum     
number of vehicles through ADT's auctions, generally have a term of one year    
and may be terminated upon 30 days' notice.  In 1996, approximately 27 per      
cent of the vehicles sold at ADT auctions were Program Cars, compared to        
approximately 31 per cent in 1995.  ADT also auctions vehicles from the         
manufacturers' own fleets and from manufacturers' affiliates such as their      
credit subsidiaries.                                                            

During 1996, General Motors Corporation and its credit subsidiaries accounted   
for approximately 8 per cent of the vehicle auction division's United States    
revenues.  ADT believes that its relationship with General Motors Corporation   
and the other vehicle manufacturers with which it does business is good.  The   
loss of General Motors Corporation's business would, however, have a material   
adverse effect on the auction division's operations.                            

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Services and Fees                                                               

Auction Services: ADT receives a variety of fees for its auction services.      
Entry fees are set charges assessed on the majority of vehicles registered for  
auction, except Program Cars, and are payable irrespective of whether the       
vehicle is sold.  If the vehicle is sold, ADT also receives an auction fee      
from the seller and a fee from the buyer of the vehicle.  At most sales, the    
buyer's auction fee is based upon the sale price of the vehicle, except for     
Program Cars where a fixed fee is charged.  At most sales, other than           
fleet/lease consignment sales and Program Car sales, the seller's auction fee   
is based on the sale price of the vehicle.  For fleet/lease consignment sales,  
the seller's auction fees are based on a fixed fee for national fleet/lease     
consignors and on the sale price of the vehicle for local fleet/lease           
consignors.  For sales of Program Cars, auction fees are fixed periodically by  
agreement with the vehicle manufacturers on a per vehicle sold basis.           

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Reconditioning Services: Customers may request ADT to prepare, for a fee, a     
detailed condition report on vehicles entered for auction.  For a separate      
fee, ADT also performs on-site reconditioning services.  The largest portion    
of reconditioning revenue relates to appearance reconditioning and paint and    
body work but more extensive body work services including body panel painting   
and repair of minor collision damage are also carried out.  Appearance          
reconditioning services include engine steam-cleaning, washing, detailing,      
buffing and waxing, and upholstery cleaning.  Other services at certain         
centers include replacement of parts, upholstery, tires and glass.              

Most manufacturers' vehicles and some fleet/lease vehicles receive appearance   
reconditioning and, if necessary, paint and body work.  The reconditioning of   
manufacturers' Program Cars generates a significant portion of ADT's            
reconditioning revenues.  Program Cars are delivered to the auction centers     
directly from rental car lots or marshaling yards, financial institutions       
deliver vehicles directly off-lease or after repossession and fleet operators   
deliver vehicles immediately from use.  These vehicles generally require        
reconditioning to bring them up to sale standards.  In many instances, these    
sellers do not have the facilities necessary to recondition the vehicles        
expediently or economically.  ADT does not usually recondition vehicles         
consigned by dealers, who generally bring fully serviced cars to auction        
directly from their lots.  Dealers who purchase reconditioned vehicles are      
able to place them in their showrooms or lots immediately, thereby minimizing   
the time between purchase and retail sale.                                      

ADT also provides high quality vehicle paint and body repair services under     
the Quality Image Services name for vehicles other than those going through     
the auction process, principally for fleet owners and insurance companies.      
The service, which is aimed at new customers in addition to traditional         
auction customers, utilizes ADT's existing reconditioning facilities and        
expertise.                                                                      

Transportation Services: ADT collects and delivers customers' vehicles and      
believes that its ability to provide transportation services at competitive     
prices is extremely valuable to its marketing efforts.  ADT operates a fleet    
of vehicle transporters and sub-contracts any additional vehicle                
transportation requirements that cannot be met by this fleet.                   

Insurance: ADT offers, for a fee, a 15-day power and drive train service        
contract provided by a third party.  ADT also undertakes to repurchase          
vehicles that have suffered odometer tampering or have an undisclosed prior     
salvage history.  ADT also assists sellers in complying with laws regarding     
title and odometer readings by providing forms which include the necessary      
representations as part of the paperwork signed and delivered in connection     
with the auction sale.  ADT's liability for losses arising from title and       
odometer insurance, power and drive train service contracts and prior salvage   
history has been negligible.                                                    

Valuation and Appraisal: ADT provides valuation and appraisal advice to         
customers in connection with their vehicle disposal programs with a view to     
assisting its customers to obtain the best possible price for their vehicles.   

Specialized Services: Specialized auctions carried out by the division include  
sales of government vehicles, to which the general public is invited, sales of  
plant and equipment, sales of construction vehicles, sales of heavy trucks,     
sales of municipal and agricultural equipment and sales of classic cars.  ADT   
provides a vehicle repossession service whereby vehicles are recovered from a   
defaulting party and delivered directly to an auction center for liquidation.   
ADT's market expertise allows it to offer a comprehensive vehicle remarketing   
service to fleet operators, ranging from collection of vehicles leaving the     
fleet to advice on vehicle replacement cycles.                                  

Competition                                                                     

ADT considers its competition to be two other significant auction chains and a  
large number of independently owned local auctions which are members of the     
National Auto Auction Association. The competing auction chains are Manheim     
Auctions, a subsidiary of Cox Broadcasting Company, and ADESA Corporation, a    
subsidiary of Minnesota Power & Light Company.  Competition is based primarily  
on price in relation to the quality and range of services offered to sellers    
and buyers of vehicles and ease of accessibility of auction locations.  ADT     
believes it provides a higher quality of service than its competitors and its   
prices may therefore be higher.                                                 

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Regulation                                                                      

Each auction center is licensed by the state in which it is located, in most    
cases as a vehicle auction or dealer.  These licensing authorities may revoke   
a license if an auction is not conducted according to regulations then in       
effect.  In addition, ADT's vehicle transportation fleet is regulated by the    
Interstate Commerce Commission.  ADT believes that it is in substantial         
compliance with the regulations to which it is subject and has not had any      
material difficulties with these regulatory authorities.                        

Employees                                                                       

As of December 31, 1996, the vehicle auction division in the United States      
employed approximately 3,900 persons on a full-time basis and approximately     
2,400 persons on a part-time basis.  The part-time employees are utilized       
primarily on auction sale days.  The majority of these employees are not        
represented by unions or covered by collective bargaining agreements.  ADT      
believes its relations with employees and their unions are generally good.      

ITEM 2. DESCRIPTION OF PROPERTIES                                               

In North America, as of December 31, 1996, ADT, through its subsidiaries,       
owned 2 customer monitoring centers, leased 19 customer monitoring centers,     
owned 22 offices and other properties and leased 315 offices and other          
properties which were used in connection with the electronic security services  
business.  In the United States, as of December 31, 1996, ADT, through its      
subsidiaries, owned 21 auction centers, leased 6 auction centers and owned or   
leased 6 offices and other properties, which were used in connection with the   
vehicle auction business.  In Europe, as of December 31, 1996, ADT, through     
its subsidiaries, owned 5 customer monitoring centers, leased 8 customer        
monitoring centers, owned 11 offices and other properties and leased 107        
offices and other properties which were used in connection with the electronic  
security services business.  In addition, as of December 31, 1996, ADT,         
through its subsidiaries, owned approximately 1,294 acres of land and leased    
approximately 284 acres of land in the United States used in connection with    
the vehicle auction business.                                                   

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ITEM 3. LEGAL PROCEEDINGS                                                       

On December 27, 1996, Westar Capital, Inc. ("WCI") filed a complaint in the     
U.S. District Court for the Southern District of Florida (the "Court") against  
the Company, the directors of the Company and Republic Industries, Inc.         
("Republic").  The complaint alleges that the Company and its directors         
breached their fiduciary duties to WCI and the Company's other shareholders     
(i) by issuing to Republic a share purchase warrant for 15,000,000 Common       
Shares (the "Republic Warrant") in connection with a proposed amalgamation      
with Republic in July 1996 (the "Republic Merger"), (ii) by adopting the        
Rights Plan, and (iii) by holding shares of the Company in one of the           
Company's subsidiaries with the intention of voting those shares as needed to   
entrench existing management.  The complaint seeks a court order (i) declaring  
the Republic Warrant null and void or preventing the Company and Republic from  
exercising their rights under the Republic Warrant, (ii) directing the Company  
to redeem the Rights Plan, and (iii) preventing the Company from voting the     
shares held by its subsidiary.                                                  

On January 3, 1997, WCI filed an amended complaint which, in addition to the    
allegations made in the prior complaints, alleges that the Company and its      
directors have attempted to interfere with WCI's voting rights by seeking       
certain information from WCI pursuant to procedures established in the          
Company's Bye-Laws.  The amended complaint seeks the same relief as the prior   
complaint and also requests that the Court confirm WCI's voting rights.         

On January 21, 1997, the Court granted WCI leave to file a second amended       
complaint.  The second amended complaint contains the same allegations as the   
amended complaint and in addition alleges (i) that the Company and its          
directors breached their fiduciary duties by setting a July 8, 1997 date for a  
meeting of the Company's shareholders, and (ii) that the Company and its        
directors violated Section 14(d) of the Securities Exchange Act of 1934, as     
amended, by making a recommendation to the Company's shareholders regarding     
the tender offer without first making certain filings with the Securities and   
Exchange Commission ("SEC").  WCI asks for a court order (i) enjoining the      
Company from holding the shareholders meeting (the "Special General Meeting")   
on July 8, 1997, (ii) compelling the Company to hold the special General        
Meeting on or before March 20, 1997, and (iii) declaring that the Company has   
violated Section 14(d) and enjoining the Company from making any further        
recommendations relating to the tender offer until the required SEC filings     
are made.                                                                       

On January 23, 1997, WCI filed a motion for a preliminary injunction asking     
the Court to enjoin the Company from holding the Special General Meeting on     
July 8, 1997, and compelling the Company to hold the Special General Meeting    
on or before March 20, 1997.  On March 4, 1997, WCI filed a supplemental brief  
in support of its motion for a preliminary injunction representing that WCI is  
no longer seeking a Special General Meeting on or before March 20, 1997 on the  
grounds that such a meeting date would now be impractical.  In its              
supplemental brief, WCI requests that the meeting date be set 30 days after     
its proxy materials for the Special General Meeting are distributed.  As of     
this date, the Court has not rendered any decision with respect to plaintiff's  
motion for a preliminary injunction.                                            

On January 27, 1997, the Company and its directors filed a motion to dismiss    
the second amended complaint based on, among other things, the Court's lack of  
personal jurisdiction over the Company and its directors and for failure to     
state a claim upon which relief can be granted.  WCI has filed papers in        
opposition to the motion.   On February 21, 997, the Court entered an order     
ruling that the second amended complaint did not adequately plead personal      
jurisdiction over the ADT defendants.  On February 27, 1997, WCI filed a third  
amended complaint.  The third amended complaint contains the same allegations   
as the second amended complaint and contains additional allegations relating    
to personal jurisdiction.                                                       

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On March 11, 1997, the court granted WCI leave to file a fourth amended         
complaint.  The fourth amended complaint contains the same allegations as       
those in the third amended complaint as well as additional allegations          
relating to the Amendment to the Rights Plan implemented by the Company on      
March 3, 1997.  In addition to the relief previously requested, the fourth      
amended complaint seeks judicial nullification of the Amendment to the Rights   
Plan and a rescission of actions by ADT if it is shown that a subsidiary of     
ADT cast decisive votes as a shareholder with respect to those actions.         

On March 17, 1997, the Company and its directors filed a motion to dismiss the  
fourth amended complaint based on, among other things, the Court's lack of      
personal jurisdiction over the Company and its directors and for failure to     
state a claim upon which relief can be granted.                                 

The Company and the Board believe that the allegations in the WCI's fourth      
amended complaint are without merit and intend to vigorously defend against     
them.                                                                           

On March 24, 1997, WCI filed a motion for a preliminary injunction (i)          
preventing Republic from selling or transferring any of the warrant shares      
it currently owns, and (ii) preventing the Chairman of ADT from exercising the  
proxy on the warrant shares.  The Company and the Board have yet to respond     
to this motion.                                                                 

On December 26, 1996, Charles Gachot filed a complaint in the Circuit Court     
for the Fifteenth Judicial Circuit in Palm Beach County, Florida against the    
Company, certain of its directors, Western and WCI.  The complaint was brought  
on behalf of a class of all shareholders of the Company and alleges that        
Western and WCI have breached their fiduciary duties to the Company's           
shareholders by offering an inadequate price for the outstanding Common         
Shares.  The complaint seeks to enjoin Western and WCI from acquiring the       
outstanding Common Shares.  The complaint also alleges that the Company and     
its directors have refused to negotiate with Western and WCI and that the       
Republic Warrant and the Rights Plan are improper.  The complaint seeks         
unspecified monetary relief from all defendants.  The Company and the Board     
believe that the allegations in Gachot's complaint against the Company and the  
directors are without merit and intend to vigorously defend against them.       

On February 7, 1997, ADT Operations, Inc. ("ADT Operations"), a subsidiary of   
ADT, filed a complaint in the Supreme Court of the State of New York, County    
of New York against The Chase Manhattan Bank, N.A. ("Chase").  The complaint    
states that Chase has been an important lender and financial advisor to ADT     
Operations since 1993, and that in the course of this business relationship,    
ADT Operations has disclosed confidential business information to Chase.  The   
complaint asserts that ADT Operations and Chase expressly agreed that Chase     
would not aid any third party in a hostile takeover bid for ADT.  The           
complaint alleges that Chase is currently aiding Western in its attempt to      
take control of ADT and that Chase's actions constitute:  (i)  a breach of an   
express agreement between Chase and ADT Operations; (ii) a breach of the        
implied covenant of good faith that is part of the express agreement between    
Chase and ADT Operations; and (iii) a breach of the fiduciary duties that Chase 
owes to ADT Operations.  The complaint seeks $50 million in monetary damages.   
The complaint also seeks to enjoin Chase from advising, funding, or             
participating in Western's attempts to take control of ADT and from disclosing  
any confidential information regarding ADT Operations and ADT.  On March 3,     
1997, Chase filed a motion for dismissal of ADT Operations' complaint or,       
alternatively, summary judgment.  This motion is scheduled to be heard on       
April 11, 1997.                                                                 

On February 7, 1997, ADT Operations filed a motion for a preliminary            
injunction, seeking to enjoin Chase from:  (i) advising, funding, or assisting  
Western in its efforts to take over ADT or participating in these efforts; and  
(ii) using or disclosing any confidential information that ADT Operations       
provided to Chase.  The motion was argued before the Court on February 24,      
1997 and is currently pending.                                                  

On March 11, 1997, Crandon Capital Partners ("CCP") filed a complaint in the    
Circuit Court for the Fifteenth Judicial Circuit in Palm Beach County, Florida  
against the Company, certain of its current and former directors, and           
Republic.  The complaint was brought by CCP in a derivative capacity on behalf  
of ADT.  The complaint alleges that ADT's directors breached their fiduciary    
duties and wasted corporate assets in connection with (i) the granting of       
options to certain officers of ADT in 1996, (ii) the issuance of the Republic   
Warrant, (iii) the implementation of the Rights Plan, and (iv) harassing and    
attempting to disenfranchise WCI.  The complaint seeks an unspecified amount    
of damages and a court order directing ADT's directors to establish a system    
of internal controls to prevent repetition of the alleged breaches of           
fiduciary duty and corporate waste.                                             

The Company and its directors believe  that the allegations in the complaint    
brought by CCP are without merit and intend to vigorously defend against them.  

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ADT Limited and various of its subsidiaries are defendants in a number of       
other pending legal proceedings incidental to present and former operations,    
acquisitions and dispositions.  ADT does not expect that the outcome of these   
proceedings, either individually or in the aggregate, will have a material      
adverse effect upon ADT's consolidated results of operations and cash flows or  
its consolidated financial position.                                            

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

No matters were submitted to a vote of security holders during the last         
quarter of the period covered by this Annual Report.                            

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PART II                                                                         

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS   

ADT Limited's common shares ("Common Shares") have been listed on the New York  
Stock Exchange ("NYSE") since August 1991 and on the London Stock Exchange      
since December 1984.                                                            

The following table sets forth, for the periods indicated, the high and low     
sales prices for the Common Shares as reported in the consolidated transaction  
reporting system on the NYSE.                                                   

                                                  High       Low
                                                     $         $
1995                                                                            

First Quarter                                      12 1/4     9 5/8 
Second Quarter                                     12 1/4    10 1/8 
Third Quarter                                      14 1/8    11 5/8 
Fourth Quarter                                     15 1/4    13     

1996                                                                            

First Quarter                                      18        14     
Second Quarter                                     19 1/2    16 1/4 
Third Quarter                                      24 3/4    15 7/8 
Fourth Quarter                                     23 1/4    18 1/2 

1997                                                                            

First Quarter to March 24                          27 5/8    21 1/4 

At March 24, 1997, 156,696,447 Common Shares were held of record by 15,749      
record holders.  Since a number of the Common Shares were held by brokers       
or other nominees, the number of record holders may not be representative       
of the number of beneficial holders.  A subsidiary of ADT Limited owns          
3,182,787 Common Shares which are included in the number outstanding.           

Dividends                                                                       

ADT Limited has not declared any dividends on the Common Shares since April     
1991.  ADT Limited has no present intention to pay any dividends on the Common  
Shares but will keep its dividend policy under review in the light of           
prevailing circumstances.  Under the terms of the senior notes and revolving    
bank credit agreement ADT Limited may not declare, pay or make any dividend or  
distribution with respect to its Common Shares, except in certain defined       
circumstances (see "Management's Discussion and Analysis of Financial           
Condition and Results of Operations - Liquidity and Capital Resources").        

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Exchange Controls and Other Limitations Affecting Security Holders              

ADT Limited has been designated as a non-resident for exchange control          
purposes by the Bermuda Monetary Authority, Foreign Exchange Control.  There    
are no limitations on the rights of non-Bermuda owners of the Common Shares     
arising out of such designation to hold or vote their shares.  Because ADT      
Limited has been designated as a non-resident for Bermuda exchange control      
purposes, there are no exchange control restrictions on its ability to          
transfer funds in and out of Bermuda or to pay dividends to United States       
residents who are holders of the Common Shares, except that ADT Limited may     
not hold Bermuda dollars except external Bermuda dollars.                       

The transfer of Common Shares already issued between persons regarded as        
resident outside Bermuda for exchange control purposes and the issue of Common  
Shares for which consent has already been granted to such persons, may be       
effected without specific consent under the Exchange Control Act of 1972 and    
regulations thereunder.  All further issues of Common Shares and any transfers  
of Common Shares involving any person regarded as resident in Bermuda for       
exchange control purposes require specific prior approval under the Exchange    
Control Act of 1972.                                                            

In accordance with Bermuda law, share certificates are only issued in the       
names of corporations, partnerships or individuals.  In the case of an          
applicant acting in a special capacity (for example, as an executor or          
trustee), certificates may, at the request of the applicant, record the         
capacity in which the applicant is acting.  Notwithstanding the recording of    
any such special capacity, ADT Limited is not bound to investigate or incur any 
responsibility in respect of the proper administration of any such estate or    
trust.                                                                          

Shares purchased for those under 21 years of age must be registered in the      
name of the parent or guardian but may be designated with the minor's initials  
for the purpose of identification.  ADT Limited will take no notice of any      
trust applicable to the shares represented by such certificates.                

As an "exempted company", ADT Limited is exempt from Bermuda laws which         
restrict the percentage of share capital that may be held by non-residents of   
Bermuda, but as an exempted company ADT Limited may not participate in certain  
business transactions, including (i) the acquisition or holding of land in      
Bermuda (other than that required for its business and held by way of lease or  
tenancy for terms of not more than 21 years) without the express authorization  
of the Bermuda legislature or the Minister of Finance; (ii) the taking of       
mortgages on land in Bermuda to secure an amount in excess of $50,000; (iii)    
the acquisition of securities created or issued by, or any interest in, any     
local company or business, other than certain types of Bermuda Government       
securities or securities of another "exempted" company, partnership or any      
other corporation resident in Bermuda but incorporated abroad; or (iv) the      
carrying on of business of any kind in Bermuda, except as necessary in          
furtherance of the business of the ADT Limited carried on outside Bermuda or    
under a license granted by the Minister of Finance of Bermuda.                  

Under current Bermuda law, no Bermuda withholding tax will be imposed upon      
payment of dividends by ADT Limited to its common shareholders.  Furthermore,   
ADT Limited has received from the Minister of Finance of Bermuda, under the     
Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking    
that, in the event of there being enacted in Bermuda any legislation imposing   
any tax computed on profits or income, including any dividend or capital gains  
withholding tax, or computed on any capital assets, gain or appreciation, or    
any tax in the nature of an estate or inheritance tax or duty, the imposition   
of such tax shall not be applicable to ADT Limited or any of its operations,    
nor to the Common Shares, preference shares or other obligations of ADT         
Limited, until the year 2016.  This undertaking does not, however, prevent the  
application of Bermuda taxes to persons ordinarily resident in Bermuda.         

Under current Bermuda law, ADT Limited is required to pay the Bermuda           
Government an annual registration fee, which is calculated by a reference to    
the authorized capital and share premium of ADT Limited.  ADT Limited pays the  
maximum fee, which is currently $25,000 per annum.                              

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ITEM 6. SELECTED FINANCIAL DATA                                                 

The selected financial data presented below has been derived from the audited   
consolidated financial statements of the Company.  The information presented    
below should be read in conjunction with, and is qualified by reference to,     
the consolidated financial statements of the Company and the related notes      
thereto and the consolidated financial statement schedules and "Management's    
Discussion and Analysis of Financial Condition and Results of Operations".      

Consolidated income statement data                                              

                                                        [Enlarge/Download Table]
                                                                                     
Year ended December 31                    1996     1995     1994     1993     1992   
                                            $m      $m       $m       $m       $m    

Net sales                                1,704.0  1,783.8  1,629.4  1,528.5  1,552.2 
                                         =======  =======  =======  =======  ======= 

Operating (loss) income (i)               (765.5)   200.8    206.0    186.8    165.3 
Interest income                             27.5     16.2     15.2     13.3     25.3 
Interest expense                          (101.0)  (116.3)   (99.3)   (76.7)   (95.7)
Gain (loss) on disposal of businesses (ii)   1.7    (36.6)    (0.3)       -     60.5 
Other income less expenses (iii)           128.8     (5.0)    (4.1)     9.8     23.8 
                                          ------   ------   ------   ------   ------ 
(Loss) income before income taxes         (708.5)    59.1    117.5    133.2    179.2 
Income taxes                                21.8    (28.1)   (34.9)   (22.5)   (20.1)
                                          ------   ------   ------   ------   ------ 

(Loss) income from continuing operations  (686.7)    31.0     82.6    110.7    159.1 
Loss from discontinued operations (iv)         -        -     (3.3)       -     (2.7)
                                          ------   ------   ------   ------   ------ 

(Loss) income before extraordinary items  (686.7)    31.0     79.3    110.7    156.4 
Extraordinary items (net of                                                          
  income taxes) (v)                         (8.4)    (9.8)       -        -      5.6 
                                          ------   ------   ------   ------   ------ 
Net (loss) income                         (695.1)    21.2     79.3    110.7    162.0 
                                         =======  =======  =======  =======  ======= 

                                               $        $        $        $        $ 
Primary (loss) earnings per common share (vi):                                       
(Loss) income from continuing operations   (5.01)    0.22     0.51     0.74     1.19 
Loss from discontinued operations              -        -    (0.03)       -    (0.02)
Extraordinary items                        (0.06)   (0.07)       -        -     0.05 
                                          ------   ------   ------   ------   ------ 
Net (loss) income per common share         (5.07)    0.15     0.48     0.74     1.22 
                                         =======  =======  =======  =======  ======= 

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Consolidated balance sheet data                                                      

At December 31                             1996     1995     1994     1993     1992  
                                            $m      $m       $m       $m       $m    

Total assets (vii)                       2,730.4  3,419.7  3,412.3  3,477.4  3,368.9 
Long-term debt (including                                                            
   current portion)                      1,068.7  1,180.3  1,211.4    953.4  1,067.8 
Convertible redeemable preference                                                    
   shares (viii)                               -      4.9      5.2    427.2    434.6 
Non-voting exchangeable shares                 -        -        -     15.0     15.1 
Exchangeable redeemable preference shares      -        -        -        -     21.0 
Total shareholders' equity (ix)            759.8  1,425.3  1,376.5  1,264.8  1,054.4 

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(i)     Operating loss in 1996 included restructuring and other non-recurring   
charges of $237.3 million relating principally to the electronic security       
services divisions in the United States and the United Kingdom, and a charge    
of $744.7 million relating to the impairment of long-lived assets following     
the adoption by the Company of Statement of Financial Accounting Standards No.  
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived      
Assets to Be Disposed Of" ("SFAS 121").  Operating income in 1995 included      
restructuring and other non-recurring charges of $34.2 million relating         
principally to the United States electronic security services division and to   
corporate restructuring in Europe.  Operating income in 1994 included           
restructuring and other non-recurring charges of $4.5 million relating to       
corporate restructuring in Europe.                                              

(ii)    Loss on disposal of businesses in 1995 included a net loss of $65.8     
million relating to the disposal by the Company of an interest in its United    
Kingdom and Continental European vehicle auction services businesses offset by  
a net gain of $31.4 million relating to the disposal by the Company of its      
entire European electronic article surveillance business.  Gain on disposal of  
businesses in 1992 related to the disposal by the ASH group of its entire       
European loss prevention business.                                              

(iii)   Other income less expenses in 1996 included a net gain of $53.4         
million relating to the disposal of the Company's entire investment in          
Limelight Group plc, and a net settlement gain of $65.0 million relating to an  
agreement in full and final settlement of the Company's litigation against BDO  
Binder Hamlyn ("BDO").  Other income less expenses in 1994 included net gains   
of $21.5 million arising from the ownership of investments and a net write off  
of $30.7 million relating to the Company's entire equity investment in Arius,   
Inc. which was held by the ASH group.  Other income less expenses in 1992       
included a $50.9 million deferred net gain arising from the Company's           
investment in Quoteplan PLC and a net write off of $33.7 million of the         
Company's equity investment in Nu-Swift plc.                                    

(iv)    Discontinued operations comprised the disposal during 1994 of all the   
Company's non-core businesses, principally Insight Travel Group.  The company   
no longer has any interests in non-core businesses.  Included in the loss from  
discontinued operations for 1994 were net losses on disposal of the non-core    
businesses amounting to $3.7 million.  Net sales from discontinued operations   
amounted to $80.6 million in 1994, $96.9 million in 1993 and $101.4 million in  
1992.  These net sales are not included in net sales in the consolidated        
income statement data.                                                          

(v)     Extraordinary items principally were comprised of the gains and losses  
arising on reacquisition/ repayment and the write off of net unamortized        
deferred refinancing costs relating to the early extinguishment of certain      
amounts outstanding under the Company's long-term debt obligations, and were    
stated net of applicable income taxes.                                          

(vi)    The calculation of primary earnings per common share was based on the   
weighted average number of common shares in issue during the period.  Such      
weighted average number of common shares in issue for the years ended December  
31, 1996, 1995, 1994, 1993 and 1992 was 137,114,415, 138,283,458, 136,148,361,  
122,043,139 and 113,480,672 common shares, respectively.                        

(vii)   Following the adoption of SFAS 121 during 1996, the Company recorded a  
charge of $744.7 million relating to the impairment of long-lived assets.       

(viii)  During 1994 the Company redeemed a significant proportion of its        
convertible redeemable preference shares.  The net effect of this transaction   
was to reduce the carrying value of the convertible redeemable preference       
shares by $422.0 million.  The Company funded the redemption from cash on hand  
and through the drawdown of long-term debt facilities.                          

(ix)    During 1993 the Company issued common shares for cash resulting in net  
proceeds of $154.8 million.                                                     

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND         
RESULTS OF OPERATIONS                                           

INTRODUCTION                                                                    

In September 1996 the Company merged with and acquired the whole of the issued  
capital of ASH, a United Kingdom quoted company.  ASH is engaged in the         
provision of electronic security services in North America and Europe.  The     
merger with and acquisition of ASH by the Company has been accounted for by     
means of the pooling of interests method of accounting pursuant to Accounting   
Principles Board Opinion No. 16.  The pooling of interests method of            
accounting assumes that the combining companies have been merged since their    
inception, and the historical consolidated financial statements for periods     
prior to consummation of the merger are restated as though the companies have   
been combined since their inception.  Accordingly, the accompanying             
consolidated financial statements give effect to the transaction by means of    
the pooling of interests and have been restated.                                

During 1995 management commenced a strategic review of the Company's business   
operations and its corporate organizational structure with a view to            
developing a business strategy which would place the Company in a stronger      
position to deal with the changing business environment and challenges facing   
its core service businesses in the late 1990s.  As part of this strategic       
review, management approved the redeployment of certain of the Company's assets 
in order to further concentrate the Company's resources on the electronic       
security services operations, principally in the United States, where           
management believes the greatest potential for future growth lies.              
Consequently, Actron Group, the Company's European electronic article           
surveillance business, was disposed of in November 1995 and in December 1995    
the Company disposed of an interest in its European vehicle auction services    
businesses.                                                                     

During the fourth quarter of 1995, the Company entered into an agreement for    
the acquisition of Alert, the tenth largest electronic security services        
company in the United States, with a predominantly residential customer base    
located principally in Texas, Florida and Georgia.                              

As part of the strategic review of its business operations undertaken during    
1995, and in the context of the acquisition of Alert and the disposal of an     
interest in the European vehicle auction services businesses, management        
commenced an evaluation of the entire group corporate structure, and the        
administrative, accounting and management information systems of its United     
States electronic security services division (the "Re-Engineering Project").    
The Re-Engineering Project, which is on-going, is intended to modify and        
improve the entire structure of the business operations in order to create a    
more profitable, efficient organization with significantly improved marketing,  
selling, installation and servicing capabilities supported by upgraded          
management information systems.                                                 

During 1996 the restructuring in the electronic security services division      
included a reorganization of senior management, the closure of a major          
corporate office in Parsippany, New Jersey, and a realignment of the            
organizational structure along the functional business lines of residential,    
commercial and customer service, rather than along geographic lines.            

During 1996, as a result of the acquisition of ASH and the further development  
of the Re-Engineering Project under the control of new senior management, the   
Company identified the need to extend the process of strategic change to        
include a significantly expanded agenda.  As a result, various strategic        
initiatives have been added to the corporate plan and the implementation of     
these plans is currently in progress and will continue throughout 1997.  In     
the United States the plans relate principally to a significant investment in   
technological infrastructure enhancements to facilitate further consolidation   
of the Company's entire customer monitoring center network down to four, state  
of the art, customer service centers, and to place the Company in a stronger    
position to take advantage of the significant opportunities in the changing     
market place.  In Europe, the plans relate principally to the merger,           
integration and consolidation of the Company's existing electronic security     
services businesses with that of ASH.                                           

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RECENT DEVELOPMENTS                                                             

In November 1996 the Company announced that it intended to dispose of the       
vehicle auction services operations in the United States in order to            
concentrate further on the expansion of the Company's electronic security       
services business.  Accordingly, the Company's vehicle auction services         
business segment was then initially reclassified as a discontinued operation    
for all years presented.  The preliminary, summarized consolidated results of   
operations of the Company for the year ended December 31, 1996 were announced   
on March 3, 1997, and were filed under Schedule 14A.  On March 17, 1997 the     
Company announced that the aforementioned intention had been rescinded and      
that the vehicle auction services operations in the United States would no      
longer be disposed of.  Accordingly, all consolidated financial information     
set forth in this Form 10-K, including the audited consolidated financial       
statements of the Company, is presented with the Company's vehicle auction      
services business segment classified as a continuing operation for all years    
presented.  There is no net effect on the reported net income and total         
shareholders' equity when comparing the preliminary, summarized consolidated    
results of operations of the Company referred to above and the consolidated     
financial information set forth in this Form 10-K.  All differences             
relate to the reclassification of the vehicle auction services business         
segment from discontinued operations to continuing operations.                  

In December 1996 Western Resources, Inc. ("Western") announced its intention    
to commence an offer to exchange all of ADT Limited's outstanding common        
shares for consideration consisting of cash and shares of Western common        
stock.  On March 3, 1997 the Company announced that its board of directors had  
determined that the offer made by Western was inadequate and not in the best    
interests of ADT Limited's shareholders.  On March 17, 1997 the offer made by   
Western commenced.                                                              

On March 17, 1997 the Company announced that it had entered into a definitive   
merger agreement, subject to shareholder approval and other customary matters,  
with Tyco International Ltd. ("Tyco"), a United States quoted company engaged   
in the manufacture of industrial and commercial products.  Tyco shareholders    
will receive one common share in the combined company for each Tyco common      
share and ADT Limited shareholders, through a reverse stock split, will         
receive 0.48133 common shares in the combined company for each ADT Limited      
common share.                                                                   

The information presented below should be read in conjunction with, and is      
qualified by reference to, the consolidated financial statements of the         
Company and the related notes thereto and the consolidated financial statement  
schedules.                                                                      

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RESULTS OF OPERATIONS                                                           

The following discussion of results of operations addresses net sales,          
operating (loss) income and certain other line items in the consolidated        
financial statements.                                                           

Net sales                                                                       

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Electronic security services                 1,406.2     1,350.9     1,253.3    
Vehicle auction services                       297.8       432.9       376.1    
                                         -------     -------     -------
                                         1,704.0     1,783.8     1,629.4
                                         =======     =======     =======

Operating (loss) income and (loss) income before income taxes                   

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Electronic security services                  (756.5)      172.4       182.1    
Vehicle auction services                        27.1        70.2        62.7    
Corporate expenses                             (36.1)      (41.8)      (38.8)   
                                         -------     -------     -------
Operating (loss) income                       (765.5)      200.8       206.0    
                                         -------     -------     -------

Interest income                                 27.5        16.2        15.2    
Interest expense                              (101.0)     (116.3)      (99.3)   
Gain (loss) on disposal of businesses            1.7       (36.6)       (0.3)   
Other income less expenses                     128.8        (5.0)       (4.1)   
                                         -------     -------     -------
(Loss) income before income taxes             (708.5)       59.1       117.5    
                                         =======     =======     =======

Restructuring and other non-recurring charges  237.3        34.2         4.5    
Charge for the impairment of long-lived assets 744.7           -           -    
Depreciation and amortization                  224.8       247.9       226.7    
Capital expenditures                           344.4       325.8       282.6    

Electronic Security Services                                                    

Net sales derived from the electronic security services division are dependent  
on the volume of new customer installations and the number of customers under   
contract for the provision of electronic monitoring services.  A majority of    
the division's revenues are derived from contractually recurring fees for       
electronic monitoring and maintenance of security systems installed at          
customer premises and other related services.  The remainder of the division's  
revenues are derived from  the outright sale and installation of security       
systems, the installation of security systems in accordance with a monitoring   
service agreement and the maintenance of security systems on a non-contractual  
basis.  Security system installation revenues are recognized when the           
installation of a system is complete.  Where a system has been installed in     
accordance with the terms of a monitoring service agreement, the Company        
retains ownership of the system and  all direct installation costs, which       
include materials, labor and installation overheads, are capitalized and        
recorded as a fixed asset under subscriber systems.  These subscriber systems   
are depreciated over their estimated useful life, which is principally 14       
years and 10 years for commercial and residential systems, respectively, or,    
in the case of commercial systems, the actual contract duration if shorter.     
All selling and marketing costs are expensed in the year incurred.              

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The following table presents the approximate number of commercial and           
residential customers in North America and Europe contracting with the Company  
for the monitoring or maintenance of electronic security systems together with  
the annualized service revenue under contract as of December 31, 1996, and the  
annual combined discontinuance rate for commercial and residential contracts    
in respect of 1996.                                                             

                                                                [Download Table]
                                                                                    

Number of Commercial  Number of Residential  Annualized Service    Annual Combined  
     Customers             Customers              Revenue        Discontinuance Rate
      672,000              1,149,000               $920m               10.4%        

ADT defines annualized service revenue as the annualized service billing        
arising from its customer base at a point in time for monitoring, maintenance   
and related services.  The aggregate annualized service billings amount takes   
account of cancellations or terminations, increases in contract revenues due    
to new contracts, additional services to existing customers and rate            
variations at the date of computation.  The actual amount of service revenue    
for future periods will vary in accordance with changes in the customer base    
and fees charged.                                                               

ADT calculates the annual combined discontinuance rate by dividing the          
annualized service revenue from contracts cancelled or reduced in price during  
the year by the annualized service revenue in force at the beginning of the     
year, expressed as a percentage.                                                

Since 1987 the division's goals have been to create a lower cost, more          
efficient operation, suitable for long-term growth and greater profitability,   
and to take advantage of the economies of scale resulting from the utilization  
of the existing infrastructure which services its commercial customer base.     
During this period the Company equipped its regional customer monitoring        
centers with enhanced computer technology to further automate the monitoring    
process and increase monitoring capacity.  As a result of increased monitoring  
and service capacity, and a lower cost structure due to manpower reductions     
and reduced facility costs, in the early 1990s the Company began marketing      
electronically monitored security systems and services at lower installation    
price points to residential customers throughout North America.  As a result    
of the rapid expansion of the Company's business during the recent past and a   
broader business strategy adopted by the Company in a changing market place,    
the Company has identified the need to improve and expand its technological     
and physical capacity in order to expand its customer base and product range.   
Consequently, the Company has approved a plan to significantly enhance its      
monitoring capacity, service quality and ability to expand its service and      
product range.  The Company will continue to aggressively market residential    
security systems in North America, while also focusing on opportunities for     
growth in the commercial sector as the economies in North America and Europe    
improve.                                                                        

Further details of the electronic security services division's business         
strategy are set out under "Description of Business - Business Description -    
Electronic Security Services."                                                  

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1996 compared with 1995                                                         

Net sales of the division increased 4.1 per cent in 1996 to $1,406.2 million    
from $1,350.9 million in 1995.  This sales increase was attributable to an      
increase of $102.1 million in the sales of the North American operations offset 
by a $46.8 million decline in the sales of the European operations, which was   
due to the exclusion of sales of the European electronic article surveillance   
operation and certain businesses operating in the ASH group, all of which were  
disposed of during 1995.  In North America the increase in sales was            
principally due to the first time inclusion of the sales of Alert which was     
acquired in December 1995, as well as increased recurring monitoring and        
maintenance revenues arising from a larger base of residential security         
systems.  Although unit residential security systems sales in North America     
increased in 1996 compared to 1995, due to price competition in the market      
place, residential installation revenues in North America showed a modest       
decline in 1996 compared with 1995.  The commercial business in the United      
States remained flat in both new system sales and installation revenues, and    
growth in recurring commercial revenues continues to be affected by these       
factors.  In Europe, after allowing for business disposals and the effect of    
foreign exchange, sales showed a modest increase in 1996 compared with 1995.    

Operating results of the division declined from $172.4 million income in 1995   
to a $756.5 million loss in 1996, principally due to a charge for the           
impairment of long-lived assets of $731.7 million and restructuring and other   
non-recurring charges of $232.5 million in 1996.                                

Operating income of the division before the charge for the impairment of        
long-lived assets and restructuring charges increased 7.2 per cent in 1996 to   
$207.7 million from $193.8 million in 1995.  Operating income before the charge 
for the impairment of long-lived assets and restructuring charges as a          
percentage of net sales ("operating margin") increased to 14.8 per cent in      
1996 from 14.3 per cent in 1995.  The increase in operating income before the   
charge for the impairment of long-lived assets and restructuring charges        
principally reflected the first time inclusion of Alert, the disposal of the    
European electronic article surveillance operation in November 1995, and the    
continuing success of the North American residential security systems sales     
program, which has achieved further advances in recurring revenues in 1996.     
However, this improvement has been offset by continued price competition and by 
increased marketing and selling costs, which have caused the contribution from  
residential installation revenues and outright residential sales to show a      
modest decline.  The North American commercial installation revenues and        
outright sales remained flat.  The contribution in Europe showed a modest       
increase.                                                                       

1995 compared with 1994                                                         

Net sales of the division increased 9.2 per cent in 1995 to $1,350.9 million    
from $1,236.6 million in 1994 (excluding net sales of $16.7 million relating    
to the Company's electronic security services businesses in Australia and New   
Zealand, disposed of in June 1994).  This increase was attributable to          
increases in net sales of $90.2 million and $24.1 million in North America and  
Europe, respectively.  The sales increase in North America was principally due  
to increased recurring monitoring and maintenance revenues arising from a       
larger base of residential security systems.  In addition, the commercial       
business in the United States experienced improved growth in new system sales   
and installation revenues.  However, corporate downsizing and cost containment  
has meant that growth in recurring revenues from the commercial sector has      
been modest.  Sales in Canada, however, have marginally declined.  The          
increase in sales in Europe was due to increased sales in the commercial        
business, particularly in the United Kingdom, as well as increased recurring    
monitoring and maintenance revenues from commercial customers, and the          
strengthening of European currencies against the US dollar.                     

Operating income of the division declined from $182.1 million in 1994 to        
$172.4 million in 1995, principally due to restructuring and other              
non-recurring charges of $21.4 million in 1995.                                 

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Operating income of the division before restructuring charges increased 6.5     
per cent in 1995 to $193.8 million from $181.9 million in 1994 (excluding       
operating income of $0.2 million relating to Australia and New Zealand,         
disposed of in June 1994).  Operating margin declined from 14.7 per cent in     
1994 (after excluding Australia and New Zealand) to 14.3 per cent in 1995       
reflecting the higher cost of adding new residential customers in North America 
during 1995.  The increase in operating income before restructuring charges in  
North America reflected the continuing success in the United States of the      
residential security systems sales program and growth in the sale of new        
systems and installation revenues in the commercial sector.  The growth in      
residential and commercial sales resulted in increased installation fees and    
related monitoring and maintenance revenues and increased utilization of the    
monitoring network in the United States.  In Canada, however, sales and         
margins have fallen and the overall business performance was disappointing.     
In Europe operating income before restructuring charges showed a modest         
increase despite pressure on margins in the electronic article surveillance     
business.  In November 1995 the Company disposed of its entire electronic       
article surveillance business.                                                  

Restructuring and other non-recurring charges                                   

During 1995, the Company commenced a strategic review of its business           
operations with a view to developing a business strategy which would place the  
Company in a stronger position to deal with the changing business environment   
and challenges facing its core electronic security services businesses in the   
late 1990s.  This strategic review process continued during 1996 following the  
completion of the acquisition of Alert, the senior management reorganization    
which took place in the first quarter of 1996, and the identification by the    
new senior management team of the need to expand significantly the terms of     
reference of the restructuring in the United States.  The effects of the        
Re-Engineering Project and the consequent restructuring are more fully          
described in note 5(i) of the notes to consolidated financial statements.  As   
a consequence of the Re-Engineering Project, in each of the fourth quarters     
of 1996 and 1995, senior executive management approved a restructuring plan     
which resulted in a charge for restructuring and other non-recurring items of   
$134.7 million and $21.4 million, respectively.                                 

During the fourth quarter of 1996, the Company commenced a strategic and        
detailed review of the electronic security services businesses acquired as      
part of the acquisition of ASH in September 1996.  In December 1996 senior      
executive management approved a restructuring plan which is intended to merge   
and integrate fully the ASH group into the ADT group by the end of 1997.  As a  
consequence of the restructuring plan a charge for restructuring and other      
non-recurring items of $97.8 millon was recorded in the fourth quarter of       
1996.  Details of the restructuring are more fully described in note 5(i) of    
the notes to consolidated financial statements.                                 

Charge for the impairment of long-lived assets                                  

Effective January 1, 1996, the Company was required to adopt SFAS 121.          
Following the adoption of SFAS 121, in the first quarter of 1996 the Company    
recorded an aggregate non-cash charge for the impairment of long-lived assets   
of $731.7 million in the electronic security services division with a           
consequential tax credit of $10.8 million.  The impairment charge comprised     
$397.1 million relating to the ADT group, principally all of which related to   
the carrying value of goodwill and other intangibles, and $334.6 million        
relating to the ASH group, of which $121.0 million related to the carrying      
value of subscriber systems installed at customers' premises which are          
included in property, plant and equipment, and $213.6 million related to the    
carrying value of goodwill and other intangibles.  Further details are set out  
in note 6(i) of the notes to consolidated financial statements.                 

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Vehicle Auction Services                                                        

Net sales of the vehicle auction services division are a function of the        
number of vehicles handled, the number of vehicles sold at auction and the      
number of vehicles handled for which ancillary services are provided.  The      
Company charges an entry fee for the majority of vehicles entered at auction.   
On the sale of a vehicle at auction, the Company charges a separate seller's    
and buyer's fee for each vehicle sold.  This fee per vehicle sold is either     
a fixed fee or a variable fee directly related to the sale price achieved.      
The fee structure for each vehicle transaction is based upon the contractual    
relationship with the customer.  Revenues from additional services, which       
include reconditioning, body repair, inspection, transportation and insurance   
are related to the number of vehicles handled and are an additional integral    
source of the division's revenue.                                               

In December 1995 the Company disposed of an interest in its United Kingdom and  
Continental European vehicle auction services businesses.                       

1996 compared with 1995                                                         

Net sales of the division declined from $432.9 million in 1995 to $297.8        
million in 1996 due to the exclusion of the sales of European Auctions which    
was sold in December 1995.                                                      

Net sales of the United States vehicle auction services business increased      
10.4 per cent in 1996 to $297.8 million from $269.8 million in 1995.  The       
volume of vehicles sold increased by approximately 7 per cent which was         
principally due to an increase in the volume of vehicles sold for fleet lease   
customers of approximately 35 per cent, while the volume of vehicles sold for   
vehicle manufacturers and new and used vehicle dealers declined by              
approximately 5 per cent and approximately 2 per cent, respectively.            

Operating income of the division declined from $70.2 million in 1995 to $25.2   
million in 1996 due to a charge for the impairment of long-lived assets of      
$13.0 million (see note 6(ii) of the notes to consolidated financial            
statements) and the exclusion of the operating income of European Auctions.     

Operating income before the charge for the impairment of long-lived assets of   
the United States vehicle auction services business increased 11.4 per cent in  
1996 to $38.2 million from $34.3 million in 1995.  Operating margin increased   
to 12.8 per cent in 1996 from 12.7 per cent in 1995.  The increase in           
operating income and operating margin were due principally to the increase in   
the volume of vehicles sold and to an increase in the ratio of vehicles sold    
to vehicles entered for sale ("conversion ratio") to 56.6 per cent in 1996      
from 55.3 per cent in 1995, which was due to a higher proportion of vehicles    
entered for sale by fleet lease customers.                                      

In December 1995 the Company disposed of an interest in European Auctions for   
an aggregate consideration of $334.9 million.  The net loss on disposal of      
$65.8 million included $136.5 million relating to the write off of net          
unamortized goodwill and other intangibles and a $23.2 million charge relating  
to cumulative currency translation adjustments.                                 

1995 compared with 1994                                                         

Net sales of the division increased 15.1 per cent in 1995 to $432.9 million     
from $376.1 million in 1994.  This increase was attributable to increases in    
net sales of $40.3 million and $16.5 million in Europe and the United States,   
respectively.  The increase in Europe was primarily attributable to an          
increase in the number of vehicles sold in 1995 of approximately 7 per cent,    
the inclusion of the vehicle reconditioning and transportation business in the  
United Kingdom which was acquired in December 1994 and the strengthening of     
European currencies against the US dollar.  In Europe the volume of vehicles    
sold for new and used vehicle dealers, fleet lease customers and vehicle        
manufacturers increased by approximately 5 per cent, approximately 10 per cent  
and approximately 8 per cent, respectively.  In the United States the volume    
of vehicles sold increased by approximately 3 per cent.  This was principally   
due to an increase in the volume of vehicles sold for fleet lease customers of  
approximately 30 per cent, offset by a decline, in each case, in the volume of  
vehicles sold for vehicle manufacturers and new and used vehicle dealers of     
approximately 5 per cent.                                                       

Operating income of the division increased 12.0 per cent in 1995 to $70.2       
million from $62.7 million in 1994.  Operating income in Europe increased by    
$6.9 million due to the increase in revenue per vehicle sold at auctions, the   
inclusion of the vehicle reconditioning and transportation business in the      
United Kingdom, effective overhead containment and the strengthening of         
European currencies against the US dollar.  Operating income in the United      
States increased by $0.6 million and operating margin declined from 13.3 per    
cent to 12.7 per cent.  This was principally due to a decline in the            
conversion ratio from 58.3 per cent in 1994 to 55.3 per cent in 1995 which was  
due to a lower proportion of vehicles entered for sale by manufacturers and to  
lower dealer conversion ratios.                                                 

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Corporate expenses                                                              

Corporate expenses comprise administrative, legal and general corporate         
expenses net of other income and include all central costs incurred not         
directly connected with the operational management of the Company's two         
businesses which are responsible for their own corporate overheads.             

The effects of the Re-Engineering Project and the merger of the ASH group into  
the ADT group resulted in a charge for restructuring and other non-recurring    
items at the corporate level in the fourth quarter of 1996 of $4.8 million.     
During 1995 management evaluated the Company's entire group corporate           
structure, in particular in the United Kingdom.  As a result, in December       
1995, senior executive management approved a restructuring plan which resulted  
in a charge for restructuring and other non-recurring items at the corporate    
level of $12.8 million.  The corporate restructuring charge in 1994 of $4.5     
million was principally attributable to the Company's corporate administration  
in the United Kingdom.  Details of the restructurings are more fully described  
in note 5(ii) of the notes to consolidated financial statements.                

OTHER ITEMS - INCOME STATEMENT                                                  

Interest income and interest expense                                            

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Interest income                                 27.5        16.2        15.2    
Interest expense                              (101.0)     (116.3)      (99.3)   

Interest income increased in 1996 compared with 1995 principally due to the     
effects of the disposal of the European vehicle auction division and the        
European electronic article surveillance business in the fourth quarter of      
1995, and the inclusion of $8.9 million interest income in 1996 related to the  
ITS Vendor Note.  Interest income increased in 1995 to compared with 1994       
principally due to the increase in the level of cash deposits held by the       
Company in 1995.                                                                

Interest expense declined in 1996 compared with 1995 principally due to the     
effects of the refinancing which took place in the third quarter of 1995.  In   
1996 interest expense included $20.3 million (1995 - $9.4 million) relating     
to Liquid Yield Option Notes discount amortization, and $3.7 million (1995 -    
$5.3 million) relating to refinancing costs amortization.  Interest expense     
increased in 1995 compared with 1994 principally due to the effects of the      
financing of the redemption of a significant proportion of the Company's        
convertible redeemable preference shares in 1994.  In 1995 interest expense     
included $9.4 million (1994 - nil) relating to Liquid Yield Option Notes        
discount amortization, and $5.3 million (1994 - $5.7 million) relating to       
refinancing costs amortization.  The Company holds no derivative financial      
instruments.                                                                    

See Liquidity and Capital Resources and notes 21 and 23 of the notes to         
consolidated financial statements which provide details of short-term and       
long-term debt, respectively.                                                   

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Disposal of businesses                                                          

In December 1995 the Company disposed of an interest in its United Kingdom and  
Continental European vehicle auction services businesses for an aggregate       
consideration of $334.9 million (see notes 18 and 34 of the notes to            
consolidated financial statements for further details).  The net loss on        
disposal of $65.8 million included $136.5 million relating to the write off of  
net unamortized goodwill and a $23.2 million charge relating to cumulative      
currency translation adjustments.                                               

In November 1995 the Company disposed of its entire European electronic         
article surveillance business for an aggregate consideration of $54.0 million.  
The net gain on disposal of $31.4 million included a $2.1 million gain          
relating to cumulative currency translation adjustments.                        

Other income less expenses                                                      

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Gains and losses arising from the                                               
ownership of investments                     54.4        (5.0)       21.5 
Write off in value of associate                    -           -       (30.7)   
Settlement gain                                 65.0           -           -    
Gains and losses on currency transactions        9.7         0.9         2.1    
Other income less expenses - net                (0.3)       (0.9)        3.0    
                                           -----        ----       -----
                                            128.8        (5.0)       (4.1)
                                           =====        ====       =====

During 1996 gains arising from the ownership of investments included a net      
gain of $53.4 million relating to the disposal in November 1996 of the          
Company's entire investment in Limelight Group plc.  The write off in value of  
associate in 1994 related to the Company's entire equity investment in Arius,   
Inc. which was held by the ASH group.  In December 1996 the Company and BDO     
entered into an agreement in full and final settlement of the Company's         
litigation against BDO.  The net gain arising on this settlement, after the     
write off of certain deferred legal costs, amounted to $69.7 million, of which  
$65.0 million was included in other income less expenses and $4.7 million was   
included in interest income.  See note 8 of the notes to consolidated           
financial statements for further details of other income less expenses.         

Income taxes                                                                    

Current income taxes principally relate to state, local and other tax           
liabilities incurred in the United States and other non-US tax liabilities.     
The Company's effective income tax rate as adjusted for financial reporting     
purposes has increased in 1996, 1995 and 1994.  This effective tax rate         
increase principally arose from an increase in the deferred tax charge.         
During 1996 the Company's deferred income tax charge was impacted by tax        
effects of the restructuring in the United States and other non-US tax          
jurisdictions.  See note 9 of the notes to consolidated financial statements    
for further details of income taxes.                                            

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Discontinued operations                                                         

Discontinued operations comprised the disposal during 1994 of all the           
Company's non-core businesses.  The Company no longer has any interests in      
non-core businesses.  Included in the loss from discontinued operations for     
1994 were net losses on disposal of the non-core businesses amounting to $3.7   
million, which included $19.1 million relating to the write off of net          
unamortized goodwill and other intangibles on the disposal of the non-core      
businesses.  The net income from operations for 1994 included in the loss from  
discontinued operations amounted to $0.4 million on net sales of $80.6 million. 

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Extraordinary items                                                             

Extraordinary items in 1996 and 1995 included net losses amounting to $1.2      
million and $1.5 million, respectively, arising on the reacquisition of         
certain of the Company's senior subordinated notes.  Further details are        
provided in notes 11 and 23(ii) of the notes to consolidated financial          
statements.                                                                     

In September 1996 the Company repaid in full all amounts owed by the ASH group  
under its senior notes and bank credit agreement.  Further details on the net   
loss amounting to $4.6 million which arose on these transactions are provided   
in notes 11 and  23(vi) of the notes to consolidated financial statements.      

In December 1996 the Company gave notice that it would redeem in full all       
amounts outstanding to the convertible capital bond holders owed by the ASH     
group.  Further details on the net loss amounting to $1.6 million which arose   
on this transaction are provided in notes 11 and 23(v) of the notes to          
consolidated financial statements.                                              

In July 1995 and December 1996 the Company repaid in full and cancelled         
certain bank credit agreements as part of refinancing arrangements at the       
time.  Further details of the net losses amounting to $8.3 million in 1995 and  
$1.0 million in 1996 which arose on these transactions are provided in notes    
11,  23(iii) and 23(iv) of the notes to consolidated financial statements.      

Dividends on preference shares                                                  

As a result of the redemption of a significant proportion of the Company's      
convertible redeemable preference shares in 1994, dividends payable on the      
balance of such shares outstanding were negligible in 1996 and 1995.            

Effects of inflation                                                            

Due to the relatively low levels of inflation experienced in 1994, 1995 and     
1996 in the major markets in which the Company operates, inflation did not      
have a significant effect on the results of the Company in these years.         

LIQUIDITY AND CAPITAL RESOURCES                                                 

Consolidated cash flow information                                              

The net decrease in cash and cash equivalents amounted to $135.0 million,       
after the positive effect of currency translation on cash and cash equivalents  
of $1.4 million.  Net cash of $308.7 million provided by operating activities   
was offset by net cash utilized by investing activities of $328.4 million and   
net cash utilized by financing activities of $116.7 million.                    

Net cash provided by operating activities of $308.7 million principally         
included cash provided by the Company's electronic security services and        
vehicle auction services divisions less other expenses and adjusted for the net 
increase in working capital.  Within the net increase of $32.7 million in       
working capital were increases in accounts receivable of $11.9 million and      
inventories and other assets of $15.0 million and a net decrease in             
liabilities of $5.8 million, principally relating to increases in accounts      
payable and deferred revenue and a decrease in other liabilities.  The          
movement in accounts receivable was principally due to an increase in accounts  
receivable in the vehicle auction services division.  The movement in deferred  
revenue was principally due to the timing of billings within the electronic     
security services division.                                                     

Net cash utilized by investing activities of $328.4 million was principally     
due to capital expenditures of $314.2 million and $25.7 million in the          
electronic security services and vehicle auction services divisions,            
respectively, $25.5 million relating to the acquisition of the minority         
interest in Alert and $34.6 million relating to the purchase of customer        
contracts to provide electronic security monitoring.  These were principally    
offset by $15.4 million received on the disposal of certain investments in and  
loans to associates and $54.1 million received on the disposal of other         
investments, principally Limelight Group plc.                                   

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Net cash utilized by financing activities of $116.7 million was principally     
due to the repayments of long-term debt of $209.9 million, principally          
relating to the ASH group, and the purchase of $23.1 million of the Company's   
senior subordinated notes at a cost of $24.0 million.  These were principally   
offset by $86.8 million relating to the proceeds from long-term debt and $24.7  
million realized on the issue of common shares.                                 

Cash, liquid resources and sources of finance                                   

Liquid assets available to the Company at December 31, 1996 represented cash    
and cash equivalents of $215.9 million.  At December 31, 1996 the Company had   
available but undrawn facilities of $35.9 million under its revolving bank      
credit agreement.                                                               

In July 1996, as part of the then agreement to combine with Republic            
Industries, Inc.  ("Republic"), ADT Limited granted to Republic a warrant       
to acquire 15 million common shares of ADT Limited at an exercise price of      
$20 per common share.  Following termination of the agreement to combine        
with Republic, the warrant vested and was exercisable by Republic in the        
six month period commencing September 27, 1996.  On March 21, 1997 the          
warrant was exercised by Republic and the Company received $300 million in      
cash.                                                                           

Future commitments and cash requirements                                        

Capital expenditures during 1997 are estimated to be approximately $487         
million which represent normal replacement needs and the purchase of            
additional equipment, facilities and customer contracts necessary to meet       
planned increases in sales.  Approximately 90 per cent of the capital           
expenditures projected for electronic security services relates to              
installation of subscriber systems at customers' premises.  This amount         
does not include any amounts for acquisitions which the Company may pursue      
from time to time.                                                              

The Company believes that the working capital at December 31, 1996, its         
available credit facilities and the current cash flows from operations are      
adequate for the Company's normal growth and operating needs, the funding of    
its capital expenditures budget and the current servicing of its debt           
requirements.                                                                   

ADT Limited has no present intention to pay any dividends on its common shares  
but will keep its dividend policy under review in the light of prevailing       
circumstances.  Under the terms of the senior notes and revolving bank credit   
agreement ADT Limited may not declare, pay or make any dividend or              
distribution with respect to its common shares, except in certain defined       
circumstances.  See note 23 of the notes to consolidated financial statements   
for further details.                                                            

Forward looking information                                                     

Certain statements in this Form 10-K constitute "forward looking statements"    
within the meaning of the Private Securities Litigation Reform Act of 1995.     
In particular any statements contained herein regarding the consummation and    
benefits of future acquisitions, as well as expectations with respect to        
future sales, operating efficiencies and product expansion, are subject to      
known and unknown risks, uncertainties and contingencies, many of which are     
beyond the control of the Company, which may cause actual results, performance  
or achievements to differ materially from anticipated results, performance or   
achievements.  Factors that might affect such forward looking statements        
included, among others, overall economic and business conditions, the demand    
for the Company's service, competitive factors in the industry, regulatory      
approvals and the uncertainty of consummation of future acquisitions.           

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                             

ADT Limited's consolidated financial statements are included on pages F-1 to    
F-77 and its consolidated financial statement schedules are included on pages   
F-78 and F-79.  Information required by Item 302 of Regulation S-K is included  
in note 35 of the notes to consolidated financial statements and under          
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations".                                                                    

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE                                            

None                                                                            

PART III                                                                        

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                      

Directors and Executive Officers                                                

Set forth below are the names, ages, positions and certain other information    
concerning the current directors and executive officers of the Company and      
three executive officers of subsidiaries of the Company as at December 31,      
1996.                                                                           

Name                      Age   Position with Company                           
----                      ---   ---------------------                           

Michael A. Ashcroft       50    Chairman of the Board; Chief Executive          
Officer     
John E. Danneberg         50    Director                                        
Raymond A. Gross          47    Senior Vice President of ADT Security           
  Services, Inc.
Alan B. Henderson         63    Director                                        
Ronnie G. Lakey           42    Director of ADT (UK) Holdings PLC               
James S. Pasman, Jr.      66    Director                                        
Michael J. Richardson     60    President and Chief Executive Officer of        
        ADT Automotive, Inc.
Stephen J. Ruzika         41    Chief Financial Officer; Executive Vice         
       President; Director
W. Peter Slusser          67    Director                                        
William W. Stinson        63    Director                                        
Raymond S. Troubh         70    Director                                        

_________________________                                                       
Mr. Ashcroft has been Chairman and Chief Executive Officer of the Company       
since 1984 and is Chairman of the Executive Committee.  He was Chairman and     
Chief Executive Officer of the Company's predecessor company, Hawley Group      
PLC, from 1977 to 1984.  He is the non-executive Chairman of BHI Corporation.   

Mr. Danneberg has been a director of the Company since December 1991 and was    
previously a director of the Company from 1984 to June 1991.  He was the        
President of Foliage Plant Systems, Inc., an interior landscape contractor,     
from 1988 to October 1995 and has been Chief Executive Officer of Sonitrol      
Corporation since August 1996, under a consulting agreement with ADT, Inc.      

Mr. Gross has been a Senior Vice President of ADT Security Services, Inc.       
since March 1, 1996.  From August 1993, he was President and Chief Executive    
Officer of Alert Centre, Inc., which was acquired by ADT in December 1995, and  
prior to that he was President/General Manager of Cellular One of Ohio from     
November 1988.                                                                  

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Mr. Henderson has been a director of the Company since 1992 and is a member of  
the Audit and Remuneration Committees.  He is Chairman of Ranger Oil (UK)       
Limited, an oil exploration and production company, and has been a director of  
Ranger Oil (UK) Limited since 1972.  He is also Chairman of Abtrust Emerging    
Economies Investment Trust Plc and Abtrust New Thai Investment Trust Plc, and   
is a director of Abtrust New Dawn Investment Trust Plc, Energy Capital          
Investment Company PLC and Greenfriar Investment Company PLC.                   

Mr. Lakey has been a director of ADT (UK) Holdings PLC since its incorporation  
in 1996.  He has operational responsibility for the Company's electronic        
security services operations in Canada and Europe.  He has held various         
positions with the Company since joining in 1987.                               

Mr. Pasman has been a director of the Company since 1992 and is a member of     
the Audit and Remuneration Committees.  He was President and Chief Operating    
Officer of National Intergroup, Inc., an industrial holding company, from 1989  
to 1991 and was Chairman and Chief Executive Officer of Kaiser Aluminum and     
Chemical Corp., an aluminum and chemical company, from 1987 to 1989.  He is a   
director of BEA Income Fund, Inc., BEA Strategic Income Fund, Inc. and BT       
Insurance Funds Trust.                                                          

Mr. Richardson has been the President and Chief Executive Officer of ADT        
Automotive, Inc., which supervises the United States vehicle auction services   
business, since 1982.                                                           

Mr. Ruzika has been a director and Executive Vice President of the Company      
since 1987, has been Chief Financial Officer since 1989 and President of ADT    
Security Services, Inc. since 1996.  He is a member of the Executive            
Committee.  He was previously Chief Financial Officer of the Company's United   
States operations.  He is also a non-executive director of BHI Corporation.     

Mr. Slusser has been a director of the Company since 1992 and is a member of    
the Audit and Remuneration Committees.  He has been the President of Slusser    
Associates, Inc., a private investment banking firm in New York City, since     
1988 and was previously a managing director and head of mergers and             
acquisitions at PaineWebber Incorporated.  He is a director of Ampex            
Corporation, a leading producer of high performance television and data         
storage recording systems.                                                      

Mr. Stinson has been a director of the Company since 1991.  He retired as       
Chairman and Chief Executive Officer of Canadian Pacific Limited in 1996 after  
serving as Chief Executive Officer for 11 years.  He remains a director of      
that company.  He is also a director of Laidlaw, Inc., Western Star Trucks      
Inc., Sun Life Assurance Company of Canada, and a number of other corporations. 

Mr. Troubh has been a director of the Company since 1991 and is a member of     
the Audit and Remuneration Committees.  He has been an independent financial    
consultant since 1974.  He is a director of America West Airlines, Inc., ARIAD  
Pharmaceuticals, Inc., Becton, Dickinson and Company, Diamond Offshore          
Drilling, Inc., Foundation Health Corporation, General American Investors       
Company, Inc., Olsten Corporation, Petrie Stores Corporation, Time Warner       
Inc., Triarc Companies, Inc. and WHX Corporation.                               

Each director is currently serving a term which expires at the next annual      
general meeting.  Each such director is eligible for re-election.  Under the    
Bye-Laws of the Company, no person other than a director retiring at a General  
Meeting of the Company shall, unless recommended by the directors, be eligible  
for election to the office of director unless, between six and 28 days before   
the meeting date, the Secretary of the Company has been given, by a             
shareholder of the Company (other than the person to be proposed) entitled to   
attend and vote at the annual general meeting or special general meeting,       
written notice of his intention to propose such person for election and also    
written notice, signed by the person to be proposed, of his willingness to be   
elected.  A director may hold any other office or position of profit under the  
Company (other than the office of Auditor) in conjunction with this office of   
director for such period and on such terms as the Company may from time to      
time determine in general meeting.                                              

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Meetings and Committees of the Board                                            

During 1996, there were eleven meetings of the Board.  All directors attended   
at least 75 per cent of the meetings of the Board and of the committees of      
which they were members.                                                        

The Board has several committees, including an Audit Committee and a            
Remuneration Committee.  The Audit Committee, formed in 1991, and the           
Remuneration Committee, formed in 1992, consist of Messrs. Henderson, Pasman,   
Slusser and Troubh each of whom is an independent director.  During 1996,       
there were four meetings of the Audit Committee and four meetings of the        
Remuneration Committee.  The function of the Audit Committee is to review the   
services performed by the Company's independent accountants and to review and   
act or report to the Board with respect to the scope of audit procedures and    
accounting practices.  The function of the Remuneration Committee is to review  
and approve compensation and other employment benefits afforded certain         
executive officers.  The Company has no standing nominating committee.          

Compensation of Directors                                                       

Directors who are not employees of the Company are paid an annual               
director's fee of $25,000 each and are reimbursed for reasonable and            
customary travel and other expenses incurred in performing their duties.        
In addition, Messrs.  Henderson, Pasman, Slusser and Troubh are each paid       
an annual sum of $15,000 for their services on the Audit and Remuneration       
Committees.                                                                     

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ITEM 11.   EXECUTIVE COMPENSATION                                               

Executive Compensation                                                          

Summary Compensation Table                                                      

Shown below is information concerning the annual and long-term compensation     
for services in all capacities to the Company for the fiscal years ended        
December 31, 1996, 1995 and 1994, of those persons who were, at December        
31, 1996 (i) the Chief Executive Officer and (ii) the other four most           
highly compensated executive officers of the Company, including three           
executive officers of a subsidiaries of the Company (the "Named Officers").     

                                                        [Enlarge/Download Table]
                                                                                       Long-Term                     
                                                                                      Compensation                   
                                              Annual Compensation(1)                     Awards                      
                                    ----------------------------------------------------------------                 
                                                                                         Securities                  
                                                                                        Underlying                   
                                                                                       Stock Options  All Other      
Name and principal position         Year             Salary             Bonus              (#)        Compensation   
---------------------------         ----          ----------          ----------       -------------  ------------   
                                                                                                                     

Michael A. Ashcroft(2)               1996         $1,143,844          $2,344,880         5,000,000     $1,330,380(3) 
Chairman of the Board; Chief         1995         $1,089,375          $2,233,219         1,500,000     $1,921,939    
Executive Officer                    1994         $1,037,500           1,945,313           750,000     $  783,403    

Raymond A. Gross                     1996         $  183,353(4)       $   82,500           100,000            -0-    
Senior Vice President of ADT         1995                -0-                 -0-               -0-            -0-    
Security Services, Inc.              1994                -0-                 -0-               -0-            -0-    

Ronnie G. Lakey                      1996         $  248,962          $  125,000           100,000     $   27,020(5) 
Director of ADT (UK) Holdings        1995         $  195,866          $  140,000            20,000     $   14,822    
PLC                                  1994         $  188,827          $  135,000            25,000     $   14,138    

Michael J. Richardson(6)             1996         $  335,000          $  222,705            40,000     $    6,461(7) 
Chief Executive Officer of ADT       1995         $  314,000          $  145,245            50,000     $    6,461    
Automotive, Inc.                     1994         $  300,000          $  115,000            45,000     $    6,480    

Stephen J. Ruzika(8)                 1996         $  686,306          $1,100,000(9)        208,333     $   40,323(10)
Chief Financial Officer; Executive   1995         $  653,625          $  250,000           500,000     $   37,432    
Vice President; Director             1994         $  622,500          $  200,000           250,000     $   35,639    

---------------------                                                           
(1)  While officers enjoy certain perquisites, such perquisites did not exceed  
the lesser of $50,000 or 10 per cent of each officer's salary and     
bonus.  Except as set forth below under "Employment Contracts,        
Termination of Employment and Change in Control Arrangements", a      
change in control of the Company does not of itself require the       
payment of any moneys to any of the Named Officers.  However, such an 
event does accelerate the vesting of certain pension rights and the   
exercisability of certain stock options.                              

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(2)  The salary, bonus and all other compensation shown in respect of 1994 and  
1995 represent Mr.  Ashcroft's entitlement to those amounts.  Mr.     
Ashcroft utilized $2,500,000 of the compensation due to him for 1995, 
being the whole of his bonus entitlement of $2,233,219 and $266,781 of
his other compensation to subscribe for options, at the rate of $2.50 
per option, to subscribe for Common Shares.  Mr.  Ashcroft also       
utilized $2,500,000 of the compensation due to him for 1994, being the
whole of his bonus entitlement of $1,945,313 and $554,687 of his other
compensation entitlement to subscribe for these options.              

(3)  The other compensation due to Mr. Ashcroft in respect of 1996 represents   
the US dollar equivalent of Pound Sterling 851,344 being an amount in 
lieu of providing Mr.  Ashcroft with retirement and death benefits    
 under a defined pension plan.  The amounts in respect of 1995 and 1994,
and which are referred to in note (2) above, were the equivalents of  
Pound Sterling 1,217,341 and Pound Sterling 511,126, respectively.    

(4)  Represents salary since joining ADT Security Services, Inc. in March       
1996.  Mr. Gross' annualized salary for 1996 was $220,000.            

(5)  Represents the amount contributed to Mr. Lakey's retirement income plan    
(1995 - $14,822, 1994 - $14,138).                                       

(6)  The salary amount shown for 1996 represents Mr. Richardson's entitlement   
to salary in the year.  Prior to becoming entitled to receive certain 
 salary, however, Mr.  Richardson elected to receive options at the rate
of $2.50 per option, to subscribe for Common Shares at an exercise    
 price of $8.625 per share, in lieu of receiving $69,444 in salary (1995
- $83,333, 1994 - $97,222).                                           

(7)  Represents $4,500 contributed to a defined contribution 401(k) pension     
benefit plan (1995 - $4,500, 1994 - $4,500) and $1,961 which is the   
aggregate incremental cost to the Company of providing Mr.  Richardson
 with enhanced group term life insurance benefits (1995 - $1,961, 1994 -
$1,980).                                                              

(8)  The salary amount shown for 1996 represents Mr. Ruzika's entitlement to    
salary in the year.  Prior to becoming entitled to receive certain    
salary, however, Mr.  Ruzika elected to receive options at the rate of
$2.50 per option, to subscribe for Common Shares at an exercise price 
of $8.625 per share, in lieu of receiving $80,136 in salary (1995 -   
$104,167, 1994 - $128,198).                                           

(9)  Mr. Ruzika earned a bonus for 1996 of $1,100,000 (1995 - $250,000) under   
a bonus arrangement by which payments are related directly to the     
performance of the Common Share price.                                

(10) Represents $37,639 contributed to Mr. Ruzika's retirement income plan      
(1995 - $35,777, 1994 - $34,003) and $2,684 which is the estimated    
aggregate incremental cost to the Company of providing Mr.  Ruzika    
with supplemental term life insurance (1995 - $1,655, 1994 - $1,636). 

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Option Grants in Last Fiscal Year                                               

Shown below are all grants of share options to the Named Officers during        
the fiscal year ended December 31, 1996.  The following table shows, along      
with certain information, hypothetical realizable values of share options       
granted for the last fiscal year, at assumed rates of cumulative share          
price appreciation over the ten-year life of such options.  These assumed       
rates of appreciation are set by the rules of the SEC and are not intended      
to forecast appreciation of the price of the Common Shares.  These              
hypothetical values have not been discounted to reflect their present           
values.                                                                         

                                                        [Enlarge/Download Table]

                                           Individual Grants                                                     
                        --------------------------------------------------------                                 

                                                                                     Potential Realizable Value  
                                         % of                                          at Assumed Annual Rates   
                                     Total Options    Exercise                       of Share Price Appreciation 
                                       Granted          or                               for Option Term(2)      
                         Options     to Employees     Base Price      Expiration                                 
Name                    Granted(1)  in Fiscal Year    ($/share)          Date           5%               10%     
----                    ---------   --------------    ---------      -----------     -----------      -----------
                                                                                                                 

Michael A. Ashcroft    5,000,000        78.3%          $15.00        Aug 4, 2003     $30,968,000      $74,713,000
Raymond A. Gross         100,000         1.6%          $16.50        May 6, 2006     $ 1,017,000      $ 2,597,000
Ronnie G. Lakey          100,000         1.6%          $16.50        May 6, 2006     $ 1,017,000      $ 2,597,000
Michael J. Richardson     40,000         0.6%          $16.50        May 6, 2006     $  407,000       $ 1,039,000
Stephen J. Ruzika        208,333         3.3%          $15.00        April 29, 2004  $ 1,452,000      $ 3,567,000

-------------------                                                             
(1) The options granted to Mr. Ashcroft and Mr. Ruzika represent the net        
increase in the number of options which were received by Mr. Ashcroft   
and Mr. Ruzika in connection with an amendment to a previously granted  
option on 3,000,000 and 125,000 Common Shares, respectively.  At the    
same time as the number of options was increased, the exercise price    
was also increased from $8.625 to $15.00.  All the other terms and      
conditions of the options, including the expiry dates, remained         
unchanged.                                                              

 Of the options granted to Mr. Gross, Mr. Lakey and Mr. Richardson, 50 per
cent are exercisable after three years from the date of grant, 25 per   
cent are exercisable after 4 years from the date of grant and 25 per    
cent are exercisable after five years from the date of grant.           

(2) Gains are reported net of the option exercise price but before taxes        
associated with exercise.  The amounts shown represent certain assumed  
rates of appreciation only.  Actual gains, if any, on option exercises  
are dependent on the future price performance of the Common Shares as   
well as the option holders' continued employment through the vesting    
period.  The potential realizable values reflected in this table may    
not necessarily be achieved.                                            

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Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values       

Shown below is information with respect to aggregate option exercises by the    
Named Officers in the fiscal year ended December 31, 1996 and with respect      
to unexercised options to purchase Common Shares granted in fiscal 1996 and     
prior years to the Named Officers and held by them at December 31, 1996.        

[CAPTION]                                                                       

                                                        [Enlarge/Download Table]
                                                                                    Value of Unexercised In-the-     
                         Shares         Value       Number of Unexercised           Money Options at Fiscal Year     
                       Acquired on   Realized on  Options at Fiscal Year End                   End(1)(2)             
                       Exercise of   Exercise of  -------------------------------------------------------------------
                       Options in    Options in                                                                      
Name                   Fiscal Year   Fiscal Year  Exercisable      Unexercisable      Exercisable       Unexercisable
----                   -----------   -----------  -----------      -------------      -----------       -------------
                                                                                                                     

Michael A. Ashcroft     825,000     $6,626,250      9,700,000        1,550,000        $78,437,190        $17,493,125 
Raymond A. Gross            -0-        -0-               -0-           100,000                -0-        $   637,500 
Ronnie G. Lakey          32,000     $  256,016         15,000          145,000        $   208,125        $ 1,209,375 
Michael J. Richardson    45,000     $  318,125        270,000          135,000        $ 3,496,750        $ 1,441,875 
Stephen J. Ruzika        12,000     $   54,900      1,141,663          516,670        $12,951,731        $ 5,831,080 

--------------------                                                            
(1) Based on the closing price of $22.875 per Common Share on December 31,      
1996.                                                                   

(2) Messrs. Ashcroft, Richardson and Ruzika were granted certain options for    
which they have paid a subscription price of $2.50 per option which has 
been taken into account for the purpose of valuing these options.       

Certain Defined Benefit Plans                                                   

The Company does not maintain any defined benefit or actuarial retirement       
plans ("pension plans").  However, Mr.  Lakey, Mr.  Richardson and Mr.          
Ruzika participate in pension plans that are maintained by indirect, wholly     
owned subsidiaries of the Company.  Certain information is set forth below      
regarding the pension plans in which Mr.  Lakey, Mr.  Richardson and Mr.        
Ruzika, as well as other employees of the Company's subsidiaries,               
participate.                                                                    

Mr. Richardson is a participant in the ADT Pension Plan maintained by ADT       
Group PLC ("ADT Group").  Mr.  Richardson is the only Named Officer who         
participates in the ADT Group's Pension Plan (the "ADT Group Plan").  The       
ADT Group Plan provides Mr.  Richardson an annual benefit payable for life      
beginning at age 60.  The annual benefit is equal to 66.7 per cent of base      
salary for the three years of the most recent ten years prior to retirement     
that produce the highest average.  Mr.  Richardson's annual benefit payable     
at age 60 for life is Pound Sterling146,095.  Since Mr.  Richardson has         
already attained age 60, the benefit payable to him upon his actual             
retirement will be adjusted based upon his actual retirement date.              
Benefits payable under the ADT Group Plan are not offset by Social Security     
benefits.                                                                       

ADT, Inc. maintains a supplemental executive retirement plan (the "ADT          
SERP").  Mr.  Lakey and Mr.  Ruzika are the only Named Officers who             
participate in the ADT SERP.  Benefits for Mr.  Ruzika under the ADT SERP       
are also supplemented under a Supplemental Benefit Agreement between Mr.        
Ruzika and ADT Management Services Limited (the "Supplemental Benefit           
Agreement").                                                                    
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The ADT SERP provides benefits to Mr.  Lakey for a total of 20 years,           
beginning at age 60.  This annual benefit is equal to 60 per cent of Mr.        
Lakey's base salary for the three consecutive years that produce the            
highest average.  This benefit is reduced by the value of any benefits          
derived from employer contributions under any other retirement plan             
maintained by ADT, Inc. or its affiliates.  Mr.  Lakey's estimated annual       
benefit payable at age 60 for a total of 20 years, net of the estimated         
offset attributable to employer contributions under certain defined             
contribution plans, is $30,764.  The estimated offset is based on the           
assumption that Mr.  Lakey will have 27 years of service at age 60.             
Benefits are not offset by Social Security benefits.                            

The ADT SERP and Supplemental Benefit Agreement together provide benefits       
payable to Mr.  Ruzika for a total of 20 years beginning at age 55.  This       
annual benefit is equal to 65 per cent of base salary and bonuses for the       
three consecutive years that produce the highest average.  Effective for        
benefits accrued after December 31, 1994, the benefit is calculated using       
base salary including, for this purpose, the purchase price of any options      
to purchase the Company's shares received in lieu of base salary.  This         
benefit is reduced by the value of any benefits derived from employer           
contributions under any other retirement plan maintained by ADT, Inc. or        
its affiliates.                                                                 

Mr.  Ruzika's estimated annual benefit payable at age 55 for a total of 20      
years, net of the estimated offset attributable to employer contributions       
under certain defined contribution plans, is $361,802.  The estimated           
offset is based upon the assumption that Mr.  Ruzika will have 28 years of      
service at age 55.  Benefits are not offset by Social Security benefits.        

Compliance with Reporting Requirements                                          

The Company believes that, during 1996, all filing requirements under           
Section 16(a) of the Exchange Act applicable to its officers, directors and     
beneficial owners of more than 10 per cent of equity securities were            
complied with on a timely basis.                                                

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Employment Contracts, Termination of Employment and Change in Control           
Arrangements                                                                    

The Company has entered into a written employment agreement with Mr.            
Ashcroft, dated as of May 8, 1993.  An amendment to the agreement was           
approved on November 4, 1996, which provides that Mr.  Ashcroft shall serve     
as Chairman of the Board and Chief Executive Officer until March 31, 2000,      
subject to renewal for additional two-year terms thereafter.  Mr.               
Ashcroft's initial base salary was $1,000,000 per annum subject to annual       
review and adjustment by the Board but may only be reduced by a maximum of      
15 per cent during the term of the agreement without Mr.  Ashcroft's            
consent.  During 1996, Mr.  Ashcroft's base salary was increased to             
$1,157,625 per annum.  Mr.  Ashcroft is also eligible for annual bonus          
payments based upon an earnings-per-share target for the Common Shares set      
each year, subject to a maximum bonus of $4,000,000.  The maximum bonus is      
payable upon attaining 117.5 per cent of the targeted earnings per share.       
As a term of the contract, Mr.  Ashcroft was granted options to purchase        
1,000,000 Common Shares under the ADT 1993 Long Term Incentive Plan, with       
50 per cent of such options exercisable at market value on the date of          
grant, as defined, 25 per cent exercisable at 110 per cent of market value,     
and 25 per cent exercisable at 120 per cent of market value, vesting in         
equal annual installments over a three-year period commencing one year from     
the date of grant and exercisable over a ten-year period.  The Company will     
make annual payments to Mr.  Ashcroft calculated to provide him with            
retirement and death benefits no less favorable than if he were a member of     
ADT Group Plan.  Such annual payments will not be less than $450,000.  The      
Company may terminate the agreement upon Mr.  Ashcroft's death, when Mr.        
Ashcroft attains the age of 60, if Mr.  Ashcroft is unable to perform his       
duties for 180 days due to ill heath, accident or otherwise, if Mr.             
Ashcroft fails to discharge his duties or engages in conduct that is            
materially injurious to the Company, or if Mr.  Ashcroft willfully and          
continually commits a material breach of the agreement.  Mr.  Ashcroft may      
terminate the agreement upon, among other reasons, a breach by the Company      
which breach (except for a material breach) is not cured within 30 days, if     
he is removed from his position as Chairman of the Board or his position as     
Chief Executive Officer, or if the scope of his duties and responsibilities     
becomes inconsistent with his position as an officer of the Company.            

Mr.  Ashcroft may also terminate the agreement without cause at any time        
upon 90 days notice.  In the event the agreement is terminated pursuant to      
its terms by the Company or without cause by Mr.  Ashcroft upon 90 days         
notice, Mr.  Ashcroft will be entitled to the pro rata portion of his base      
salary, bonus payment, pension payment and other benefits but will not be       
entitled to any additional payments.  If the agreement is terminated due to     
a disability, Mr.  Ashcroft will be entitled to an additional payment equal     
to two times his highest base salary.  In the event the agreement is            
terminated by the Company without cause or by Mr.  Ashcroft with cause, Mr.     
Ashcroft will be entitled to a severance payment equal to two times his         
highest base salary and average bonus payment, annual pension payments for      
the year of termination and the following two years, and one year of any        
other benefits previously provided.                                             

Mr.  Ruzika entered into an employment agreement with ADT as of February        
26, 1997.  The agreement provides that Mr.  Ruzika will serve as Chief          
Financial Officer of ADT and as President of ADT Security Services, Inc.,       
ADT Operations, Inc. and ADT, Inc., subsidiaries of ADT, from March 1, 1997     
until February 28, 1999, subject to renewal for additional two-year terms       
thereafter.  Mr.  Ruzika's initial annual base salary will be $694,500 and      
will be subject to annual review for possible adjustments.  Mr.  Ruzika         
will also be eligible for annual bonus payments at the discretion of the        
Company as well as other compensation and benefit plans of the Company          
including stock option plans.  The termination provisions of this agreement     
provide that in the event that agreement is terminated by ADT without cause     
or by Mr.  Ruzika with cause, Mr.  Ruzika will be entitled to receive a         
severance payment equal to twice his base salary and certain fringe             
benefits.                                                                       

Mr.  Lakey entered into an employment agreement with ADT, Inc. as of            
January 16, 1997.  The agreement provides that Mr.  Lakey will have             
operational responsibility for ADT's electronic security operations in          
Canada and Europe from January 16, 1997 until December 31, 1999, subject to     
renewal for additional two-year terms thereafter.  Mr.  Lakey's initial         
annual base salary will be $265,000.  Mr.  Lakey will also be eligible for      
annual bonus payments at the discretion of the Company as well as certain       
other enumerated benefits and relocation expenses.  The termination             
provisions of this agreement include a term to the effect that, in the          
event that agreement is terminated by ADT without cause or by Mr.  Lakey        
with cause, Mr.  Lakey will be entitled to receive his base salary and          
certain fringe benefits for two years.                                          

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Under the ADT SERP (and, in the case of Mr.  Ruzika, the Supplemental           
Benefit Agreement), Mr.  Ruzika and Mr.  Lakey become fully vested in the       
accrued benefits thereunder upon a Change in Control (as defined below) of      
the Company or ADT, Inc.  Mr.  Ruzika also becomes fully vested upon a          
Change in Control (as defined below) of ADT Management Services Limited.        
If Mr.  Ruzika or Mr.  Lakey's employment is terminated within one year         
from the date of a Change in Control, the terminated executive will             
receive, in lieu of all other amounts due to him under the ADT SERP (and,       
in Mr.  Ruzika's case, the Supplemental Benefit Agreement), a lump-sum          
distribution equal to the present value of his accrued benefit and an           
additional amount calculated under a formula intended to put him in the         
same after-tax position that he would have been in if he had received a         
lump-sum distribution of his accrued benefit on his normal retirement date.     
Under this formula Mr.  Ruzika would currently receive an additional amount     
of approximately $653,295 and Mr.  Lakey would currently receive an             
additional amount of approximately $54,253.                                     

A "Change in Control" is deemed to have occurred under the ADT SERP if :        
(1) any person (other than Laidlaw, Inc. or its affiliates, collectively        
the "Laidlaw Group") acquires more than 40 per cent of the Company's voting     
stock (the triggering percentage has been reduced from 40 per cent to 35        
per cent because the Laidlaw Group's beneficial ownership of the Company's      
voting stock is less than 20 per cent);  (2) the Laidlaw Group becomes the      
beneficial owner of more than 45 per cent of the Company's outstanding          
voting stock;  (3) there is a change of 50 per cent or more in the              
composition of the Company's directors during any 3-year period (unless the     
change in directors was approved by two thirds of the directors in office       
at the beginning of such 3-year period or directors who had previously been     
elected with the requisite two thirds approval);  (4) a person acquires the     
legal right to direct the management and policies of the Company (other         
than by virtue of membership on the board of directors or a committee of        
the board);  (5) the Company ceases to own, directly or indirectly through      
subsidiaries, at least 80 per cent of the voting stock of ADT, Inc. or (6)      
the shareholders of either the Company or ADT, Inc. approve a merger,           
consolidation or a sale or disposition of all, or substantially all, of the     
assets of the Company or ADT, Inc. as the case may be, with the relevant        
company not surviving.  In the case of Mr.  Ruzika, the provisions of (4),      
(5), and (6) above include a change in the ownership of ADT Management          
Services Limited (as well as the Company or ADT, Inc.).                         

Mr.  Richardson entered into an employment agreement with ADT Automotive        
Holdings, Inc.  ("ADT Automotive Holdings"), the corporate parent of ADT        
Automotive, Inc., as of November 30, 1993.  The agreement provides that Mr.     
Richardson will serve as Chief Executive Officer of ADT Automotive Holdings     
and its subsidiaries from December 1, 1993 until July 31, 1996, subject to      
renewal for additional one-year terms thereafter.  The agreement was            
renewed on a year-to-year basis as of July 31, 1996.  The agreement             
provides that the term will be extended for an additional one year period       
thereafter unless either ADT Automotive Holdings or Mr.  Richardson shall       
have given the other notice of intention not to extend the term six months      
prior to July 31, 1997.  On January 29, 1997, ADT Automotive Holdings and       
Mr.  Richardson entered into an agreement which provides that Mr.               
Richardson's time to give such notice is extended to and including April        
30, 1997.  Mr.  Richardson's initial annual base salary will be $300,000        
and will be subject to annual review for possible increases.  Mr.               
Richardson will also be eligible for annual bonus payments at the               
discretion of the Company.  The termination provisions of this agreement        
include a term to the effect that, in the event that agreement is               
terminated by ADT Automotive Holdings without cause or by Mr.  Richardson       
with cause, Mr.  Richardson will be entitled to receive his base salary and     
certain fringe benefits for two years or the remaining term of the              
agreement, whichever is longer.                                                 

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Mr. Richardson has also entered into an incentive compensation agreement        
for payment upon the successful sale of ADT Automotive Holdings by the          
Company.  To the extent that the gross consideration for such sale exceeds      
$430 million, on completion of the sale, ADT has agreed to pay Mr.              
Richardson one-half of one per cent of such excess.  Gross consideration is     
deemed to be the aggregate of proceeds received by ADT and debt remaining       
in the auctions group which is assumed by the purchaser other than debt         
considered to be a component of working capital, including bank overdrafts.     

The Remuneration Committee of the Board has considered the recommendations      
of the Company's outside independent human resources consultants, and has       
reviewed industry practices concerning change in control severance              
benefits.  In view of the need to minimize employee distractions and to         
retain employee loyalty and dedication to the Company and to assure             
attention to the Company's performance pending resolution of the Western        
Offer, on February 27, on the recommendation of the Remuneration Committee,     
the Board unanimously approved a severance agreement between Mr.  Gross and     
ADT Security Services, Inc. in the event of a change of control, which          
severance arrangement it has determined is fair and consistent with             
industry practices.  The agreement provides that in the event that there is     
a "Severance Change in Control" (as defined below) of ADT prior to February     
9, 2000, and either (x)  Mr.  Gross's employment is terminated without          
cause or (y)  Mr.  Gross terminates his employment for good reason, Mr.         
Gross shall be entitled to (a) an amount of severance pay equal to twice        
the total of (i) the higher of his annual full base salary as of the date       
of termination or as of the date of the Severance Change in Control,            
calculated on an annualized basis, plus (ii) the amount of the bonus            
awarded to Mr.  Gross, if any, in the year prior to the date of termination     
and (b) for the twelve-month period following such termination, benefits        
substantially similar to the higher of those which Mr.  Gross is receiving      
immediately prior to the date of termination or as of the date of the           
Severance Change in Control.  A "Severance Change in Control" is deemed to      
have occurred under the severance agreement if:  (1) any person becomes the     
beneficial owner of more than 50 per cent of ADT's then-outstanding voting      
securities;  (2) there is a change of 50 per cent or more in the                
composition of the Company's directors during the term of the agreement         
(unless the change in directors was approved by two thirds of the directors     
in office at the beginning of such term or directors who had previously         
been elected with the requisite two thirds approval);  (3) a person             
acquires the legal right to direct the management and policies of the           
Company (other than by virtue of membership on the board of directors or a      
committee of the board); or (4) the shareholders of ADT approve a merger,       
consolidation or a sale or disposition of all, or substantially all, of the     
assets of ADT in which ADT is not the surviving entity.                         

In 1996, the Remuneration Committee of the Board resolved to increase the       
subscription price and size of certain share options held by Mr.  Ashcroft      
and Mr.  Ruzika.  In 1993, Mr.  Ashcroft and Mr.  Ruzika were granted           
options to subscribe for 3,000,000 and 125,000 Common Shares respectively       
at an exercise price of $8.625 per share for which each was required to pay     
$2.50 per option, representing a total payment of $7,500,000 and $312,500       
respectively, as a condition of vesting.  In 1996, the exercise price of        
these options was increased to $15 and the number of related shares was         
increased to 8,000,000 and 333,333 respectively.  All the other material        
terms and conditions remained unchanged.  These changes were approved by        
the shareholders of the Company.  At the time that the Remuneration             
Committee approved these changes, the closing price of the Common Shares        
was $14.75.  In November 1996, the Remuneration Committee resolved that the     
options of Mr.  Ashcroft be transferable and, at the same time, in return,      
Mr.  Ashcroft agreed to extend the termination date of his employment           
agreement from March 31, 1998 to March 31, 2000.                                

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In November 1996, the Remuneration Committee also approved a bonus plan         
under which Mr.  Ruzika is to receive a bonus of $200,000 when the Common       
Share price exceeds $21.00 for a continuous period of 30 trading days and       
$200,000 each time the Common Share price exceeds by $1.00 for a continuous     
period of 30 trading days the share price level at which a bonus payment        
was previously made.  The plan is due to expire in 2001 or such earlier         
date as the Common Share price exceeds $30.00 for a continuous period of 30     
trading days.  Should the share price exceed $30.00 within two and one half     
years, Mr.  Ruzika will receive an additional payment of $1,000,000.            

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

Security Ownership of Certain Beneficial Owners and Management                  

The following table sets forth certain information, with respect to             
beneficial ownership (determined in accordance with Rule 13d-3 under the        
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Common     
Shares by any person known by the Company to beneficially own more than         
five per cent of the outstanding Common Shares (i) as at December 31, 1996      
by FMR Corp. ("FMR"); (ii) as at March 17, 1997 by WCI; (iii) as at             
March 21, 1997 by Republic; and (iv) as at March 24, 1997 by (a) all            
directors of the Company, (b) the named directors and officers of the           
Company, including three executive officers of subsidiaries of the Company      
and (c) all directors and executive officers of the Company as a group.         
An asterisk indicates ownership of less than one per cent of outstanding        
Common Shares.                                                                  

           Number of
Name of Beneficial Owner               Common Shares             Per cent of    
or Identity of Group             Beneficially Owned(1),(2)         Class(3)     
---------------------------      -------------------------       -----------    

Westar Capital, Inc. (4)                                                        
818 Kansas Avenue                                                             
Topeka, Kansas 66601                    38,287,111                  24.9%     
FMR Corp.(5)                                                                    
82 Devonshire Street                                                          
Boston, Massachusetts 02109              8,416,744                   5.4%     
Republic Industries, Inc.(6)                                                    
450  East Las Olas Boulevard                                                  
Fort Lauderdale, Florida 33301          15,000,000                   9.8%     
M.A. Ashcroft(6)(7)                      11,525,718                   7.0%      
J.E. Danneberg                                  102                     *       
R.A. Gross                                    2,000                     *       
A.B. Henderson                                  621                     *       
R.G. Lakey                                   25,000                     *       
J.S. Pasman, Jr.                              2,000                     *       
M.J. Richardson                             327,837                     *       
S.J. Ruzika                               1,307,407                     *       
W.P. Slusser                                  2,800                     *       
W.W. Stinson                                  3,010                     *       
R.S. Troubh                                   2,500                     *       
All directors and executive officers                                            
as a group, 11 persons(8)              13,198,995                   8.0%    

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(1) Includes Common Shares which may be acquired upon exercise of the           
following number of options to purchase Common Shares from the Company  
exercisable on or within 60 days of March 24, 1997 held by the          
following persons:  M.A. Ashcroft, 10,150,000 (excluding 15,000,000     
Common Shares owned by Republic for which Mr. Ashcroft, as Chairman of  
ADT, holds a proxy as described in footnote 6, but as to which Mr.      
Ashcroft disclaims beneficial ownership);  R.A. Gross, nil;  R.G.       
Lakey, 25,000;  M.J.  Richardson, 315,000 and S.J.  Ruzika, 1,291,665.  

(2) For purposes of this table, a person or group of persons is deemed to       
have "beneficial ownership" of any Common Shares which such person has  
the right to acquire on or within 60 days after March 24, 1997.  For    
purposes of computing the percentage of outstanding Common Shares held  
by each person or group of persons named above, any security which such 
person or persons has or have the right to acquire on or within 60 days 
after March 24, 1997 is deemed to be outstanding, but is not deemed to  
be outstanding for the purpose of computing the percentage ownership of 
any other person.                                                       

(3) Based upon Common Shares outstanding on March 24, 1997, but excluding       
3,182,787 Common Shares owned by a subsidiary of the Company.           

(4) The Company has received an Amendment No. 10 to Schedule 13D dated March    
17, 1997 filed with the SEC by WCI, a wholly owned subsidiary of        
Western Resources Inc., in respect of ownership of 38,287,111 Common    
Shares.  The Company has not attempted to verify independently any of   
the information contained in the Schedule 13D.                          

(5) The Company has received an Amendment No. 4 to Schedule 13G dated           
February 14, 1997 filed with the by SEC in respect of ownership of      
8,416,744 of Common Shares at December 31, 1996 by accounts under the   
discretionary investment management of its wholly owned subsidiaries    
Fidelity Management Research Company and Fidelity Management Trust      
Company.  As of December 31, 1996, FMR exercised sole voting power with 
respect to 112,714 Common Shares and sole dispositive power with        
respect to 8,416,744 Common Shares.  The Company has not attempted to   
independently verify any of the information contained in the Schedule   
13G.                                                                    

(6) The Company has received an Amendment No. 2 to Schedule 13D dated           
March 26, 1997, describing that on March 21, 1997, Republic, through    
Triangle Corporation, a Delaware corporation and a wholly owned         
subsidiary of Republic ("Triangle"), purchased 15,000,000 Common Shares 
by exercise of the Republic Warrant.  Under the terms of the Republic   
Warrant, Triangle has granted the Chairman of ADT an irrevocable proxy  
to vote, at any meeting of ADT's shareholders, the 15,000,000 Common    
Shares issued under the Republic Warrant, with respect to any matter    
which shall be voted upon by ADT's shareholders.  The proxy expires as  
to any such Common Shares on the earlier of (i)  September 27, 1998 and 
(ii) the date such shares are no longer held by Republic or any of its  
affiliates or nominees.  Mr.  Ashcroft, the current Chairman of ADT,    
disclaims beneficial ownership of the Common Shares held by Triangle.   

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(7) The number of Common Shares beneficially owned by Mr. Ashcroft includes     
718 Common Shares owned by Mr. Ashcroft's wife.                         

(8) The address for these officers and directors is the address of the          
Company.                                                                

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                       

Certain Relationships and Related Transactions                                  

ADT, Inc., a wholly owned subsidiary of ADT, entered into a consulting          
agreement with John E.  Danneberg, one of ADT's directors, as of August 28,     
1996.  The agreement provides that Mr.  Danneberg, as an independent            
consultant, will serve as Chief Executive Officer of Sonitrol Corporation       
("Franchisor") and certain franchisees of Franchisor owned or acquired by       
affiliates of ADT, Inc.  The agreement provides that the initial term of        
such engagement shall be for a period of six months commencing on September     
1, 1996 and shall be automatically renewed on a month to month basis unless     
written notice is given by ADT, Inc. or Mr.  Danneberg not to renew the         
agreement at least 30 days before the end of such initial term, which           
notice was not given.  Under the terms of the agreement, ADT, Inc. pays Mr.     
Danneberg a monthly fee of $15,000 and Mr.  Danneberg is reimbursed             
directly for all reasonable out-of-pocket business expenses.                    

PART IV                                                                         

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K        

(a)   Consolidated Financial Statements                                         

Report of Independent Accountants                                               
Consolidated Statements of Income for the years ended                           
December 31, 1996, 1995 and 1994                                          
Consolidated Balance Sheets at December 31, 1996 and 1995                       
Consolidated Statements of Cash Flows for the years ended                       
December 31, 1996, 1995 and 1994                                          
Consolidated Statements of Changes in Shareholders' Equity for the years ended  
December 31, 1996, 1995 and 1994                                          
Notes to Consolidated Financial Statements                                      

Consolidated Financial Statement Schedules                                      

Schedule II - Valuation and Qualifying Accounts                                 

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(b)   Exhibits                                                                  

2.1  Agreement and Plan of Merger by and among ADT Limited, Limited Apache,   
Inc. and Tyco International Ltd. dated as of March 17, 1997.(6)     

3.1  Memorandum of Association (as altered) and Bye-Laws of ADT Limited       
(incorporating all amendments to May 26, 1992).(1)                  

3.2  Certified copy of a resolution approved at the Annual General Meeting of 
  common shareholders of ADT Limited held on October 12, 1993, approving
  an increase in the authorized common share capital of ADT Limited from
$19.5 million to $22.0 million.(4)                                  

4.1  Indenture relating to the senior notes dated August 4, 1993 among ADT    
  Operations, as issuer, and ADT Limited and certain subsidiaries of ADT
Operations, as guarantors, and The Chase Manhattan Bank (National   
Association), as trustee, and the form of senior note included      
therein.(2)                                                         

4.2  Indenture relating to the senior subordinated notes dated August 4, 1993 
among ADT Operations, as issuer, and ADT Limited, as guarantor, and 
  NationsBank of Georgia, National Association, as trustee, and the form
of senior subordinated note included therein.(2)                    

4.3  Indenture dated as of July 1, 1995 among ADT Operations, Inc., ADT       
  Limited and Bank of Montreal Trust Company, as trustee and the form of
note included therein. (5)                                          

4.4  Rights Agreement between ADT Limited and Citibank, N.A. dated as of      
November 6, 1996.(9)                                                

4.5  First Amendment between ADT Limited and Citibank, N.A. dated as of March 
    3, 1997 to Rights Agreement between ADT Limited and Citibank, N.A. dated
as of November 6, 1996.(9)                                          

10.1  Rules of the ADT UK Executive Share Option Scheme (1984), amended to      
   reflect the reverse split of Common Shares effective June 17, 1991.(1)*

10.2  Rules of the ADT International Executive Share Option Plan, amended to    
   reflect the reverse split of Common Shares effective June 17, 1991.(1)*

10.3  Rules of the ADT UK and International Executive Share Option Schemes      
(1984) New Section, amended to reflect the reverse split of Common  
Shares effective June 17, 1991.(1)*                                 

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10.4  Rules of the ADT Senior Executive Share Option Plan, amended to reflect   
the reverse split of Common Shares effective June 17, 1991.(1)*     

10.5  US (1990) Stock Option Plan of ADT Limited, amended to reflect the        
reverse split of Common Shares effective June 17, 1991.(1)*         

10.6  Employment Agreement dated May 8, 1993 between ADT Limited and Michael    
Anthony Ashcroft.(2)*                                               

10.7  Amendment to Employment Agreement dated December 18, 1996 between ADT     
Limited and Michael Anthony Ashcroft.(9)*                           

10.8  Employment agreement between ADT Limited and Stephen J. Ruzika dated as   
of February 26, 1997.(9)*                                           

10.9  Employment agreement between ADT, Inc. and Ron G. Lakey dated as of       
January 16, 1997.(9)*                                               

10.10 Agreement between ADT Automotive Holdings, Inc. and Michael J.            
Richardson dated as of January 29, 1997.(9)*                        

10.11 Incentive Compensation Agreement between ADT, Inc. and Michael J.         
Richardson dated as of February 10, 1997.(9)*                       

10.12 Severance Agreement between ADT Security Services, Inc. and Raymond       
Gross dated as of February 26, 1997.(9)*                            

10.13 Consulting Agreement between ADT, Inc. and John E. Danneberg dated as of  
August 28, 1996.(9)*                                                

10.14 Form of Indemnification Agreement.(9)*                                    

10.15 The ADT 1993 Long-Term Incentive Plan (as amended February 29,            
1996).(3)*                                                          

10.16 Purchase Agreement dated June 29, 1995 among ADT Operations, Inc., ADT    
   Limited and Merrill Lynch & Co., Inc. and the related pricing agreement
(5)                                                                 

10.17 US$200,000,000 Credit Agreement dated as of January 9, 1997, among ADT    
Operations, Inc., as the Borrower, and Certain Commercial Lending   
 Institutions as the Lenders, and the Bank of Nova Scotia as the Agent
for the Lenders.                                                    

10.18 Guaranty, dated as of January 9, 1997, made by ADT Limited in favor of    
each of the Lender Parties (as defined therein).                    

10.19 Subsidiary Guarantor Guaranty, dated as of January 9, 1997, made by each  
    Subsidiary Guarantor (as defined therein) in favor of each of the Lender
Parties (as defined therein).                                       

10.20 Pound Sterling 90,000,000 Facility Agreement dated March 17, 1997, among  
 ADT Finance Plc, as the Borrower, ADT (UK) Holdings PLC and Others as
    Guarantors, The Bank of Nova Scotia as Arranger and as Agent and Others.

10.21 ADT Limited Guarantee dated as of March 25, 1997, in respect of a         
 Pound Sterling 90,000,000 facility made available to ADT Finance Plc.

10.22 Pound Sterling 27,000,000 On Demand Facility Letter dated January 3,      
1997, between ADT Finance Plc and The Bank of Nova Scotia.          

10.23 ADT Limited Guarantee in respect of the obligations of ADT Finance Plc    
under a  Pound Sterling 27,000,000 Facility Letter dated January 3, 
1997.                                                               

10.24 Agreement dated December 29, 1995 among ADT (UK) Limited, ADT Holdings    
BV, Ruskin Limited, ADT Limited, Loanoption Limited and Integrated  
Transport Systems Limited for the sale and purchase of European     
Auctions.(7)                                                        

10.25 Agreement among ADT Limited, Thomas J. Gibson and Integrated Transport    
Systems Limited dated December 29, 1995.(8)*                        

10.26 Agreement among ADT Limited, David B. Hammond and Integrated Transport    
Systems Limited dated December 29, 1995.(8)*                        

10.27 Common Share Purchase Warrant issued by ADT Limited on July 1, 1996 to    
Republic Industries, Inc.(10)                                       

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11.1  Statement regarding the computation of earnings per common share.         

21.1  List of subsidiaries of ADT Limited                                       

23.1  Consent of independent accountants to the incorporation by reference of   
this Annual Report into Form S-3 and Forms S-8.                     

27    Financial Data Schedule (for SEC use only).                               

--------------                                                                  
  (1)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1992.      

(2)   Previously filed as an Exhibit to the Registrant's Quarterly  
Report on Form 10-Q for the quarter ended June 30, 1993.

 (3)   Previously filed as an Exhibit to the Registrant's Registration
     Statement dated May 16, 1996, on Form S-8 filed May 17, 1996.

  (4)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1993.      

(5)   Previously filed as an Exhibit to the Registrant's Quarterly  
Report on Form 10-Q for the quarter ended June 30, 1995.

   (6)   Previously filed as an Exhibit to the Registrant's Current Report
dated March 24, 1997 on Form 8-K filed March 25, 1997.  

   (7)   Previously filed as an Exhibit to the Registrant's Current Report
   dated December 29, 1995 on Form 8-K filed January 16, 1996.

  (8)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1995.      

   (9)   Previously filed as an Exhibit to the Registrant's Schedule 14D-9
dated March 3, 1997.                                    

   (10)  Previously filed as an Exhibit to the Registrant's Current Report
dated July 10, 1996 on Form 8-K filed July 11, 1996.    

*     Management contract or compensatory plan.                     

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(c)   Reports on Form 8-K                                                       

Current Reports on Form 8-K were filed by ADT Limited on September 19, 1996,    
October 21, 1996 and November 12, 1996 regarding the acquisition of and merger  
with Automated Security (Holdings) PLC.                                         

A Current Report on Form 8-K was filed by ADT Limited on March 25, 1997,        
regarding the Agreement and Plan of Merger with Tyco International Ltd.         

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SIGNATURES      

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the registrant has duly caused this report to be signed on its     
behalf by the undersigned, thereunto duly authorized.                           

   ADT LIMITED

                 By: /s/ Stephen J. Ruzika
                      ----------------------
                 Stephen J. Ruzika
                      Director and Executive
              Vice President
Date:  March 26, 1997                                                           

Pursuant to the requirements of the Securities Exchange Act of 1934, this       
report has been signed below by the following persons on behalf of the          
registrant and in the capacities and on the dates indicated.                    

                                                                [Download Table]
                                                                                   
          SIGNATURE                      TITLE                         DATE        
/s/ Michael A. Ashcroft     Chairman of the Board and Chief          March 26, 1997
--------------------------  Executive Officer (Principal Executive                 
Michael A. Ashcroft         Officer)                                               

/s/ Stephen J. Ruzika       Chief Financial Officer, Executive Vice  March 26, 1997
--------------------------  President and Director                                 
Stephen J. Ruzika           (Principal Financial Officer and                       
                            Principal Accounting Officer)                          

/s/ John E. Danneberg       Director                                 March 26, 1997
--------------------------                                                         
John E. Danneberg                                                                  

/s/ Alan B. Henderson       Director                                 March 26, 1997
--------------------------                                                         
Alan B. Henderson                                                                  

/s/ James S. Pasman, Jr.    Director                                 March 26, 1997
--------------------------                                                         
James S. Pasman, Jr.                                                               

/s/ W. Peter Slusser        Director                                 March 26, 1997
--------------------------                                                         
W. Peter Slusser                                                                   

/s/ William W. Stinson      Director                                 March 26, 1997
--------------------------                                                         
William W. Stinson                                                                 

/s/ Raymond S. Troubh       Director                                 March 26, 1997
--------------------------                                                         
Raymond S. Troubh                                                                  

52      

ADT LIMITED     

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES  

                                                                        Page
Consolidated Financial Statements                                               
Report of Independent Accountants..........................................F-2  
Consolidated Statements of Income                                               
for the years ended December 31, 1996, 1995 and 1994.....................F-3
Consolidated Balance Sheets at December 31, 1996 and 1995..................F-4  
Consolidated Statements of Cash Flows                                           
for the years ended December 31, 1996, 1995 and 1994.....................F-5
Consolidated Statements of Changes in Shareholders' Equity                      
for the years ended December 31, 1996, 1995 and 1994.....................F-8
Notes to Consolidated Financial Statements................................F-10  

Consolidated Financial Statement Schedules                                      
Schedule II - Valuation and Qualifying Accounts...........................F-78  

The consolidated financial statements and consolidated financial statement      
schedules were approved by the Board of Directors of ADT Limited on March 26,   
1997.                                                                           

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ADT LIMITED 

Report of Independent Accountants                                               

To the Board of Directors and Shareholders of ADT Limited                       

We have audited the consolidated financial statements and the consolidated      
financial statement schedules of ADT Limited listed in the index on page F-1.   
These consolidated financial statements and consolidated financial statement    
schedules are the responsibility of the Company's management.  Our              
responsibility is to express an opinion on these consolidated financial         
statements and consolidated financial statement schedules based on our audits.  

We conducted our audits in accordance with generally accepted auditing          
standards in the United States.  Those standards require that we plan and       
perform the audit to obtain reasonable assurance about whether the consolidated 
financial statements are free of material misstatement.  An audit includes      
examining, on a test basis, evidence supporting the amounts and disclosures in  
the consolidated financial statements.  An audit also includes assessing the    
accounting principles used and significant estimates made by management, as     
well as evaluating the overall consolidated financial statement presentation.   
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion, the consolidated financial statements referred to above         
present fairly, in all material respects, the consolidated financial position   
of ADT Limited as at December 31, 1996 and 1995, and the consolidated results   
of its operations and cash flows for each of the three years in the period      
ended December 31, 1996 in conformity with generally accepted accounting        
principles in the United States.  In addition, in our opinion, the              
consolidated financial statement schedules referred to above, when considered   
in relation to the basic consolidated financial statements taken as a whole,    
present fairly, in all material respects, the information required to be        
included therein.                                                               

As discussed in note 6 to the consolidated financial statements, effective      
January 1, 1996, the Company adopted the provisions of Statement of Financial   
Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived       
Assets and for Long-Lived Assets to Be Disposed Of".                            

COOPERS & LYBRAND                                                               
Hamilton, Bermuda                                                               
March 26, 1997                                                                  
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ADT LIMITED 

Consolidated Statements of Income 

                                                                [Download Table]
Year ended December 31                               1996      1995      1994   
                                             Notes    $m        $m        $m    

                                                                                
Net sales                                      4    1,704.0   1,783.8   1,629.4 
Cost of sales                                        (920.0)   (990.4)   (913.4)
Selling, general and administrative expenses         (567.5)   (558.4)   (505.5)
Restructuring and other non-recurring charges  5     (237.3)    (34.2)     (4.5)
Charge for the impairment of long-lived assets 6     (744.7)     -         -    
                                                    -------   -------   ------- 

Operating (loss) income                        4     (765.5)    200.8     206.0 
Interest income                                        27.5      16.2      15.2 
Interest expense                                     (101.0)   (116.3)    (99.3)
Gain (loss) on disposal of businesses       7,34        1.7     (36.6)     (0.3)
Other income less expenses                     8      128.8      (5.0)     (4.1)
                                                    -------   -------   ------- 

(Loss) income before income taxes                    (708.5)     59.1     117.5 
Income taxes                                   9       21.8     (28.1)    (34.9)
                                                    -------   -------   ------- 

(Loss) income from continuing operations             (686.7)     31.0      82.6 
Loss from discontinued operations             10          -         -      (3.3)
                                                    -------   -------   ------- 

(Loss) income before extraordinary items             (686.7)     31.0      79.3 
Extraordinary items (net of income taxes)     11       (8.4)     (9.8)        - 
                                                    -------   -------   ------- 

Net (loss) income                                    (695.1)     21.2      79.3 
Dividends on preference shares                28       (0.3)     (0.3)    (13.3)
                                                    -------   -------   ------- 

Net (loss) income available to common shareholders   (695.4)     20.9      66.0 
                                                    =======   =======   ======= 

Primary and fully diluted (loss) earnings                                       
   per common share                           12          $         $         $ 
(Loss) income from continuing operations              (5.01)     0.22      0.51 
Loss from discontinued operations                         -         -     (0.03)
Extraordinary items                                   (0.06)    (0.07)        - 
                                                    -------   -------   ------- 

Net (loss) income per common share                    (5.07)     0.15      0.48 
                                                    =======   =======   ======= 

See notes to consolidated financial statements.                                 

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ADT LIMITED 

Consolidated Balance Sheets 

At December 31                                              1996        1995    
                                       Notes              $m          $m
Assets                                                                          
Current assets:                                                                 
Cash and cash equivalents                                  215.9       350.9    
Accounts receivable - net                     13           210.7       196.4    
Inventories                                   14            39.2        38.0    
Prepaid expenses and other current assets     15           117.0        34.5    
                                                     -------     -------

Total current assets                                       582.8       619.8    

Property, plant and equipment - net           16         1,513.6     1,571.3    
Goodwill and other intangibles - net          17           458.0     1,053.6    
Investment in and loans to associate       18,34               -        88.8    
Long-term investments                         19           100.6         2.0    
Other long-term assets                        20            75.4        84.2    
                                                     -------     -------

Total assets                                             2,730.4     3,419.7    
                                                     =======     =======

Liabilities and shareholders' equity                                            
Current liabilities:                                                            
Short-term debt                               21           209.2        44.9    
Accounts payable                                           138.0       112.0    
Other current liabilities                     22           293.6       227.2    
                                                     -------     -------

Total current liabilities                                  640.8       384.1    

Long-term debt                                23           910.1     1,174.8    
Deferred revenue                              24           146.1       137.4    
Deferred income taxes                         25            91.5       142.4    
Other long-term liabilities                   26           182.1       135.2    
Minority interests                            27               -        15.6    
                                                     -------     -------

Total liabilities                                        1,970.6     1,989.5    
                                                     -------     -------

Commitments and contingencies                 32                                

Convertible redeemable preference shares      28               -         4.9    

Shareholders' equity:                                                           
Common shares                                 30            14.1        13.9    
Additional paid-in capital                                                      
Share premium                                           882.5       858.0 
Contributed surplus                                   1,563.1     1,563.1 
Treasury shares                               31           (79.7)      (79.7)   
Accumulated deficit                                     (1,598.8)     (903.4)   
Cumulative currency translation adjustments                (21.4)      (26.6)   
                                                     -------     -------

Total shareholders' equity                                 759.8     1,425.3    
                                                     -------     -------
Total liabilities and shareholders' equity               2,730.4     3,419.7    
                                                     =======     =======

See notes to consolidated financial statements                                  

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ADT LIMITED 

Consolidated Statements of Cash Flows 

Year ended December 31                          1996        1995        1994    
                                            $m          $m          $m

Cash flows from operating activities                                            
Net (loss) income                             (695.1)       21.2        79.3    
Adjustments to reconcile net (loss) income                                      
to net cash provided by operating activities:                             
Charge for the impairment of long-lived assets 744.7           -           -    
Depreciation                                   206.2       209.0       189.0    
Goodwill and other intangibles amortization     18.6        38.9        37.7    
Restructuring and other non-recurring charges  217.4        32.7         4.5    
Interest on ITS Vendor Note                     (8.9)          -           -    
Liquid Yield Option Notes discount amortization 20.3         9.4           -    
Yield maintenance amortization -                                                
senior notes - ASH                            1.5         1.1         0.6 
Refinancing costs amortization                   3.7         5.3         5.7    
Deferred income taxes                          (39.5)       18.4        24.9    
Extraordinary items                              8.4         9.8           -    
Gain on disposal of property, plant                                             
and equipment                                (2.4)       (1.7)       (3.1)
(Gain) loss on disposal of businesses           (1.7)       36.6         0.3    
(Gain) loss on disposal of investment                                           
in associates                                (1.2)        5.1        (4.2)
Gain arising from the ownership of investments (53.2)       (0.1)      (17.3)   
Write off in value of associate                    -           -        30.7    
Settlement gain                                (69.7)          -           -    
Gain on currency transactions                   (9.7)       (0.9)       (2.1)   
Loss on disposal of discontinued operations        -           -         3.7    
Other                                            2.0         1.1        (2.6)   

Changes in assets and liabilities:                                              
Accounts receivable                            (11.9)      (36.3)      (14.3)   
Inventories                                     (3.3)        0.6        (3.9)   
Other assets                                   (11.7)       (5.7)        3.6    
Accounts payable                                11.3         6.1        16.5    
Deferred revenue                                 4.3         2.7         8.0    
Other liabilities                              (21.4)      (16.3)        6.1    
                                           -----       -----       -----
Net cash provided by operating activities      308.7       337.0       363.1    
                                           -----       -----       -----

See notes to consolidated financial statements                                  

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Cash flows from investing activities                                            
Purchase of property, plant and equipment     (344.4)     (325.8)     (282.6)   
Disposal of property, plant and equipment       10.0         8.0        13.5    
Acquisition of businesses                      (25.5)      (68.3)      (14.8)   
Purchase of customer contracts                 (34.6)       (0.5)       (2.3)   
Purchase of other investments                   (6.8)       (0.4)       (6.1)   
Disposal of businesses                           3.0       254.8        10.0    
Disposal of discontinued operations                -           -         4.6    
Disposal of investment in and loans                                             
to associates                                15.4         7.8        40.2 
Disposal of other investments                   54.1         0.2        72.5    
Other                                            0.4         5.6        (6.6)   
                                           -----       -----       -----
Net cash utilized by investing activities     (328.4)     (118.6)     (171.6)   
                                           -----       -----       -----

Year ended December 31                         1996        1995        1994     
                                          $m          $m          $m

Cash flows from financing activities                                            
Net receipt (repayments) of short-term debt     10.9      (103.9)      (26.2)   
Repayments of long-term debt                  (209.9)     (216.9)       (1.3)   
Repayment of long-term acquisition debt            -       (39.6)          -    
Proceeds from long-term debt                    86.8       314.0       240.6    
Debt refinancing costs                             -       (12.0)       (1.0)   
Purchase of senior subordinated notes          (24.0)      (33.7)          -    
Proceeds from issue of common shares            24.7         7.0         7.3    
Redemption of convertible redeemable                                            
 preference shares                           (4.9)          -      (420.2)
Dividends paid by ADT                           (0.3)       (0.3)      (18.1)   
Dividends paid by ASH                              -        (4.5)       (3.3)   
Other                                              -        (0.3)      (11.7)   
                                           -----       -----       -----
Net cash utilized by financing activities     (116.7)      (90.2)     (233.9)   
                                           -----       -----       -----

Effect of currency translation on cash                                          
and cash equivalents                          1.4         0.8         2.1 
                                           -----       -----       -----

Net (decrease) increase in cash and           (135.0)      129.0       (40.3)   
cash equivalents                                                          
Cash and cash equivalents at beginning of year 350.9       221.9       262.2    
                                           -----       -----       -----

Cash and cash equivalents at end of year       215.9       350.9       221.9    
                                           =====       =====       =====

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Cash payments during the year for                                               
Interest                                        77.3       103.5        86.0    
Income taxes                                     8.9        15.0        10.3    

Non-cash investing and financing activities                                     
Exchange of Liquid Yield Option Notes            0.4           -           -    
Conversion of convertible redeemable                                            
preference shares                               -         0.1           - 
Exchange of non-voting exchangeable shares         -           -         9.7    

In conjunction with the acquisition of                                          
businesses, net (assets) liabilities                                      
were assumed as follows                                                   
Goodwill and other intangibles                  10.3       123.0        12.7    
Cash paid (net of cash assumed)                (25.5)      (68.3)      (14.8)   
                                           -----       -----       -----

Net (assets) liabilities assumed               (15.2)       54.7        (2.1)   
                                           =====       =====       =====

See notes to consolidated financial statements                                  

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Year ended December 31                          1996        1995        1994    
                                            $m          $m          $m

In conjunction with the disposal of businesses,                                 
net assets were disposed as follows                                       
Cash received (net of cash disposed)             3.0       254.8        10.0    
Notes received                                     -        87.9        10.5    
Ordinary shares received                           -         0.9           -    
Deferred consideration                             -         5.6           -    
Currency translation adjustments transferred on                                 
disposal of businesses                          -       (22.2)          - 
(Gain) loss on disposal of businesses (including                                
net unamortized goodwill and other intangibles                            
and cumulative currency translation                                       
adjustments)                                 (1.7)       36.6         0.3 
                                             ---       -----        ----

Net assets disposed                              1.3       363.6        20.8    
                                             ===       =====        ====

In conjunction with the disposal of                                             
discontinued operations, net assets                                       
were disposed as follows                                                  
Cash received (net of cash disposed)               -           -         4.6    
Loss on disposal of discontinued operations                                     
(including net unamortized goodwill and                                   
other intangibles)                              -           -         3.7 
                                             ---       -----        ----

Net assets disposed                                -           -         8.3    
                                             ===       =====        ====
See notes to consolidated financial statements                                  

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ADT LIMITED 

Consolidated Statements of Changes in Shareholders' Equity  

                                                        [Enlarge/Download Table]
                                                                             Cumulative           
                                                                   Accum-      currency           
                          Common   Share   Contributed  Treasury   ulated    translation          
                          shares  premium    surplus     shares   deficit    adjustments    Total 
                            $m      $m         $m          $m        $m           $m          $m  

                                                                                                  
At January 1, 1994 -                                                                              
   as previously reported  13.0    710.8     1,442.7     (102.9)  (1,060.9)     (45.4)      957.3 
Pooling of interests with                                                                         
   ASH (note 3)             0.7    133.1       126.5          -       77.1      (29.9)      307.5 
                          -----    -----     -------     ------    -------      -----     ------- 
At January 1, 1994 -                                                                              
   as restated             13.7    843.9     1,569.2     (102.9)    (983.8)     (75.3)    1,264.8 

Common shares issued        0.1      7.2           -          -          -          -         7.3 
Exchange of non-voting                                                                            
   exchangeable shares        -        -        (8.1)      23.1          -          -        15.0 
Reversal of redemption                                                                            
   premium on convertible                                                                         
   preference shares          -        -         1.8          -          -          -         1.8 
Net income                    -        -           -          -       79.3          -        79.3 
Dividends on ADT preference                                                                       
  shares                      -        -           -          -      (13.3)         -       (13.3)
Dividends on ASH                                                                                  
   preference shares (i)      -        -           -          -       (4.3)         -        (4.3)
Currency translation                                                                              
  adjustments                 -        -           -          -          -       25.9        25.9 
                          -----    -----     -------     ------    -------      -----     ------- 
At December 31, 1994       13.8    851.1     1,562.9      (79.8)    (922.1)     (49.4)    1,376.5 

Common shares issued        0.1      6.9           -          -          -          -         7.0 
Conversion of convertible                                                                         
   preference shares          -        -         0.3          -          -          -         0.3 
Exchange of non-voting                                                                            
   exchangeable shares        -        -        (0.1)       0.1          -          -           - 
Net income                    -        -           -          -       21.2          -        21.2 
Dividends on ADT                                                                                  
   preference shares          -        -           -          -       (0.3)         -        (0.3)
Dividends on ASH                                                                                  
   preference shares (i)      -        -           -          -       (2.2)         -        (2.2)
Currency translation                                                                              
   adjustments                -        -           -          -          -       (0.5)       (0.5)
Currency translation                                                                              
   adjustments transferred                                                                        
   on disposal of businesses                                                                      
   and associates             -        -           -          -          -       23.3        23.3 
                          -----    -----     -------     ------    -------      -----     ------- 
At December 31, 1995       13.9    858.0     1,563.1      (79.7)    (903.4)     (26.6)    1,425.3 

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Common shares issued        0.2     24.5           -          -          -          -        24.7 
Exchange of Liquid Yield                                                                          
   Option Notes               -        -         0.3          -          -          -         0.3 
Net loss                      -        -           -          -     (695.1)         -      (695.1)
Dividends on ADT                                                                                  
   preference shares          -        -           -          -       (0.3)         -        (0.3)
Currency translation and                                                                          
   other adjustments          -        -        (0.3)         -          -        5.2         4.9 
                          -----    -----     -------     ------    -------      -----      ------ 
At December 31, 1996       14.1    882.5     1,563.1      (79.7)  (1,598.8)     (21.4)      759.8 
                          =====    =====     =======     ======    =======      =====      ====== 

See notes to consolidated financial statements                                  

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ADT LIMITED 

Consolidated Statements of Changes in Shareholders' Equity (continued)

(i)   Prior to the Company's merger with Automated Security (Holdings) PLC      
("ASH") in September 1996 (note 3), ASH had issued and outstanding two classes  
of convertible cumulative redeemable preference shares.  The dividends on       
these preference shares have been charged to the accumulated deficit account    
during the relevant periods.  Given the terms and conditions of the preference  
shares and that the holders of these preference shares received ADT common      
shares at the time of the Company's merger with ASH, the dividends have not     
been included in the calculation of earnings per common share in any period     
presented.                                                                      

See notes to consolidated financial statements                                  

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ADT LIMITED 

Notes to Consolidated Financial Statements  

Note 1 - Basis of consolidated financial statements                             

The consolidated financial statements have been prepared in United States       
dollars in accordance with generally accepted accounting principles in the      
United States and as described in notes 2 and 3.  The preparation of            
consolidated financial statements in accordance with generally accepted         
accounting principles in the United States requires management to make          
extensive use of estimates and assumptions that affect the reported amounts of  
assets and liabilities and disclosure of contingent assets and liabilities at   
the date of the consolidated financial statements and the reported amounts of   
revenues and expenses during the reporting period.  These management estimates  
include an allowance for doubtful receivables, estimates of future cash flows   
associated with assets, asset impairments, and useful lives for depreciation    
and amortization, loss contingencies, income taxes and valuation allowances     
for deferred tax assets, and the determination of discount and other rate       
assumptions for pension and post-retirement employee benefit expenses.  Actual  
results could differ from those estimates.  Certain figures at December 31,     
1995 and for the years ended December 31, 1995 and 1994 have been reclassified  
to conform to the 1996 presentation.                                            

Note 2 - Summary of significant accounting policies                             

Principles of consolidation                                                     

The consolidated financial statements incorporate the financial statements of   
ADT Limited ("ADT"), a company incorporated in Bermuda, and its subsidiaries    
(the "Company").  ADT is a holding company with no independent business         
operations or assets other than its investment in its subsidiaries,             
intercompany balances and holdings of cash and cash equivalents.  ADT's         
businesses are conducted through its subsidiaries.  The Company consolidates    
companies in which it owns or controls more than fifty per cent of the voting   
shares unless control is likely to be temporary.  The results of subsidiary     
companies acquired or disposed of during the financial year are included in     
the consolidated financial statements from the effective date of acquisition    
or up to the date of disposal except in the case of pooling of interests (note  
3).  All significant intercompany balances and transactions have been           
eliminated in consolidation.                                                    

Associates                                                                      

For investments in which the Company owns or controls more than twenty per      
cent of the voting shares, or over which it exerts significant influence over   
operating and financial policies, the equity method of accounting is used in    
the consolidated financial statements.  The investment in associates is shown   
in the consolidated balance sheets as the Company's proportion of the           
underlying net assets of these companies plus any goodwill attributable to the  
acquisitions less any write off required for a permanent diminution in value.   
The consolidated statements of income include the Company's share of net        
income of associates less applicable goodwill amortization.                     

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Currency translation                                                            

The results of subsidiaries and associates located outside the United States    
which account in a functional currency other than United States dollars are     
translated into United States dollars at the average rate of exchange for the   
year.  The assets and liabilities of subsidiaries and associates located        
outside the United States which account in a functional currency other than     
United States dollars are translated into United States dollars at the rate     
ruling at the balance sheet date.  Currency translation adjustments arising     
from the use of differing exchange rates from period to period are included as  
a separate component in shareholders' equity.                                   

The gains and losses arising from currency transactions are included in the     
consolidated statements of income.                                              

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Cash and cash equivalents                                                       

Cash and cash equivalents include cash on hand, demand deposits and highly      
liquid instruments, with an original maturity of three months or less.  As a    
result of the short-term maturity of these financial instruments their carrying 
value is approximately equal to their fair market value.                        

Inventories                                                                     

Inventories are carried at the lower of cost or net realizable value.  Cost     
includes an addition for production overheads where appropriate and is          
determined on a first-in first-out basis.                                       

Property, plant and equipment                                                   

Property, plant and equipment are carried at cost less accumulated              
depreciation.  Depreciation is provided to write off the cost of the assets     
over their estimated useful lives, using the straight line method, at the       
following annual rates:                                                         

Owned property and related improvements       2% to 4%                          
Leased property and related improvements      term of lease                     
Subscriber systems                            shorter of actual contract        
                                   duration or 7%, and 10%
Other plant and equipment                     7% to 40%                         

Repairs and maintenance costs are expensed as incurred.  Gains and losses       
arising on the disposal of property, plant and equipment are included in the    
consolidated statements of income.                                              

Goodwill and other intangibles                                                  

The goodwill that arises where the acquisition cost of subsidiaries and         
associates exceeds the fair values attributable to the underlying net assets    
is capitalized and is being amortized on a straight line basis over its         
estimated useful life, covering periods not exceeding forty years.  Goodwill    
arising on the acquisition of associates is included in investment in           
associates.  Costs attributable to the acquisition, including the costs of any  
reorganization arrangements, less related income, are treated as reducing the   
value of the net assets acquired.  The carrying value of goodwill is evaluated  
periodically in relation to the operating performance and future undiscounted   
cash flows of the underlying businesses.  Where, in the opinion of the          
Company, a permanent diminution in the value of goodwill has occurred, the      
amount of the diminution is included in the consolidated statements of income.  
Other intangibles principally comprise customer contracts which are being       
amortized on a straight line basis over periods not exceeding ten years.        

Income taxes                                                                    

Deferred tax liabilities and assets are recognized for the expected future tax  
consequences of events that have been included in the consolidated financial    
statements or tax returns.  Deferred tax liabilities and assets are determined  
based on the differences between the consolidated financial statements and tax  
bases of assets and liabilities, using tax rates in effect for the years in     
which the differences are expected to reverse.                                  

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Share premium and contributed surplus                                           

In accordance with the Bermuda Companies Act 1981, when ADT issues shares for   
cash at a premium to their par value, the resulting premium is credited to a    
share premium account, a non-distributable reserve.  When ADT issues shares in  
exchange for shares of another company, the excess of the fair value of the     
shares acquired over the par value of the shares issued by ADT is credited,     
where applicable, to contributed surplus which is, subject to certain           
conditions, a distributable reserve.                                            

Net sales                                                                       

Net sales represent the invoiced value of goods and services to outside         
customers net of sales-related taxes.                                           

Revenue recognition                                                             

Revenue from services or products is recognized in the consolidated statements  
of income as services are rendered or deliveries made.  Service charges, which  
consist of subscriber billings for services not yet rendered, are deferred and  
taken into income as earned and the deferred element is all included in         
long-term liabilities.  Revenue from the installation of electronic security    
systems is recognized when installations are completed.                         

Pensions and post-retirement benefits                                           

The Company operates various pension and post-retirement benefit plans          
designed in accordance with conditions and practices in the countries           
concerned.  Contributions or accruals for costs are based on periodic actuarial 
valuations and are charged to the consolidated statements of income on a        
systematic basis over the expected average remaining service lives of current   
employees.                                                                      

Note 3 - Merger with Automated Security (Holdings) PLC                          

In September 1996 ADT merged with and acquired the whole of the issued capital  
of ASH, a United Kingdom quoted company.  ASH is engaged in the provision of    
electronic security services in North America and Europe.  Under the terms of   
the transaction, ASH shareholders received 3 ADT common shares for every 92     
ASH ordinary shares, 2 ADT common shares for every 31 ASH 5 per cent            
convertible cumulative redeemable preference shares and 2 ADT common shares     
for every 31 ASH 6 per cent convertible cumulative redeemable preference        
shares.  The total consideration in respect of the whole of the issued capital  
of ASH consisted of the issue of 7,034,940 ADT common shares (note 30(i)).      

The merger with and acquisition of ASH by ADT has been accounted for by means   
of the pooling of interests method of accounting pursuant to Accounting         
Principles Board Opinion No. 16.  The pooling of interests method of            
accounting assumes that the combining companies have been merged since their    
inception, and the historical consolidated financial statements for periods     
prior to consummation of the merger are restated as though the companies have   
been combined since their inception.  Accordingly, the consolidated financial   
statements give effect to the transaction by means of the pooling of interests  
and have been restated.                                                         

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The consolidated financial statements of ASH have previously been presented in  
pounds sterling, ASH's functional currency.  For the purposes of these          
consolidated financial statements, ASH's consolidated financial statements have 
been translated into United States dollars at the appropriate exchange rates.   
In addition, ASH's financial year end is November 30, with appropriate          
quarterly period ends of February 28, May 31, and August 31.  These periods     
have not yet been amended in order to facilitate timely reporting.  It is       
these periods which have been used to give effect to the pooling of interests   
with ADT.  Certain figures of ASH for all periods presented have been           
reclassified to conform to the ADT presentation.                                

Combined and separate results of ADT and ASH for the periods preceding the      
merger were as follows:                                                         

                           ADT Group   ASH Group Adjustments    Combined
                                  $m          $m          $m          $m

Six months ended June 30, 1996 (unaudited)                                      
Net sales                          715.6       118.1           -       833.7    
Extraordinary items                 (1.2)          -           -        (1.2)   
Net loss                          (347.7)     (328.9)        0.5(i)   (676.1)   
                              ------      ------      ------      ------

Year ended December 31, 1995                                                    
Net sales                        1,525.4       258.4           -     1,783.8    
Extraordinary items                 (9.8)          -           -        (9.8)   
Net income (loss)                   41.5       (18.7)       (1.6)(ii)   21.2    
                              ------      ------      ------      ------

Year ended December 31, 1994                                                    
Net sales                        1,375.9       253.5           -     1,629.4    
Net income (loss)                  111.0       (31.7)          -        79.3    
                              ------      ------      ------      ------

(i)     Income tax adjustment arising on preference share dividends accrued by  
the ASH group but not payable following merger.                                 

(ii)    Income tax adjustment of $0.6 million credit referred to in (i) above,  
and a $2.2 million charge relating to cumulative currency translation           
adjustments on the disposal of businesses and associates by the ASH group whose 
consolidated financial statements were prepared in pounds sterling - its        
functional currency.                                                            

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Note 4 - Segment information                                                    

The Company is engaged in two service businesses, electronic security services  
in North America and Europe and vehicle auction and related services in the     
United States.  The Company's principal activities in the electronic security   
services business are the electronic monitoring and maintenance of its          
installed base of security systems and the installation of new, monitored       
security systems to add to its installed base.  The Company's vehicle auction   
services business operates a network of large auction centers which provide a   
range of vehicle redistribution services and an organized wholesale             
marketplace for the sale and purchase of used vehicles.                         

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net sales                                                                       
Electronic security services (i)             1,406.2     1,350.9     1,253.3    
Vehicle auction services (ii)                  297.8       432.9       376.1    
                                         -------     -------     -------
                                         1,704.0     1,783.8     1,629.4
                                         =======     =======     =======

Operating (loss) income                                                         
Electronic security services (i)              (756.5)      172.4       182.1    
Vehicle auction services (ii)                   27.1        70.2        62.7    
Corporate (iii)                                (36.1)      (41.8)      (38.8)   
                                         -------     -------     -------
                                          (765.5)      200.8       206.0
                                         =======     =======     =======

(i)     In 1996 electronic security services operating income was stated after  
a charge of $232.5 million (1995 - $21.4 million) relating to restructuring     
and other non-recurring items (note 5(i)) and after a charge for the            
impairment of long-lived assets of $731.7 million (note 6(i)).                  

During 1996 the Company disposed of a European electronic security services     
business operated by the ASH group.  The net gain on disposal of $1.7 million   
was included in the gain on disposal of businesses (note 7(iii)).               

In November 1995 the Company disposed of its entire European electronic         
article surveillance business.  The net gain on disposal of $31.4 million was   
included in the loss on disposal of businesses (note 7(ii)).                    

During 1995 the Company disposed of certain of the European electronic          
security services operations and businesses operated by the ASH group.  The     
net loss on disposal of $2.2 million was included in the loss on disposal of    
businesses (note 7(iii)).                                                       

During 1994 the Company disposed of its entire Australasian electronic          
security service businesses, and also disposed of certain of the North          
American electronic security services operations of the ADT group and the ASH   
group.  The net loss on disposal of $0.3 million was included in the loss on    
disposal of businesses (note 7(iii)).                                           

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The following information represents the amounts included in the electronic     
security services business segment information above which related to the       
businesses and operations disposed of.                                          

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net sales                                        0.7        62.7        97.4    
Operating loss                                  (0.9)       (5.3)       (1.0)   

(ii)    In 1996 vehicle auction services operating income was stated after a    
charge for the impairment of long-lived assets of $13.0 million (note 6(ii)).   

In  December 1995 the Company disposed of an interest in its United Kingdom     
and Continental European vehicle auction services businesses ("European         
Auctions") (notes 18 and 34).  The net loss on disposal of $65.8 million was    
included in the loss on disposal of businesses (note 7(i)).                     

The following information represents the amounts included in the vehicle        
auction services business segment information above which related to the        
businesses disposed of.                                                         

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net sales                                          -       163.1       122.8    
Operating income                                   -        35.9        29.0    

(iii)   Corporate expenses comprise administrative, legal and general           
corporate expenses net of other income.  In 1996 corporate expenses were        
stated after a charge of $4.8 million (1995 - $12.8 million; 1994 - $4.5        
million) relating to restructuring and other non-recurring items (note 5(ii)).  

In 1996 corporate expenses included $11.3 million related to professional and   
other transaction costs arising in connection with the merger of ADT and ASH    
and the terminated merger with Republic Industries, Inc. ("Republic"),          
together with various refinancing costs incurred by the ASH group prior to the  
merger with ADT of $1.6 million (1995 - $5.0 million).                          

(iv)    The costs incurred in producing and communicating advertising are       
generally expensed when incurred.  The total amount of advertising expense for  
the year included in the consolidated statements of income amounted to $65.7    
million (1995 - $58.9 million; 1994 - $47.1 million).                           

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Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Depreciation and amortization                                                   
Electronic security services                   209.2       221.9       202.5    
Vehicle auction services                        15.0        25.4        23.5    
Corporate                                        0.6         0.6         0.7    
                                         -------     -------     -------
                                           224.8       247.9       226.7
                                         =======     =======     =======

Capital expenditures                                                            
Electronic security services                   314.2       292.4       259.2    
Vehicle auction services                        25.7        31.8        23.1    
Corporate                                        4.5         1.6         0.3    
                                         -------     -------     -------
                                           344.4       325.8       282.6
                                         =======     =======     =======

Identifiable assets                                                             
Electronic security services                 1,898.0     2,514.9     2,337.8    
Vehicle auction services                       465.1       438.1       809.8    
Corporate                                      367.3       466.7       264.7    
                                         -------     -------     -------
                                         2,730.4     3,419.7     3,412.3
                                         =======     =======     =======

Net sales                                                                       
North America                                1,358.6     1,228.5     1,121.8    
Europe                                         345.4       555.3       490.9    
Australasia                                        -           -        16.7    
                                         -------     -------     -------
                                         1,704.0     1,783.8     1,629.4
                                         =======     =======     =======

Operating (loss) income                                                         
North America                                 (483.6)      153.0       156.8    
Europe                                        (281.9)       47.8        49.0    
Australasia                                        -           -         0.2    
                                         -------     -------     -------
                                          (765.5)      200.8       206.0
                                         =======     =======     =======

Identifiable assets                                                             
North America                                2,300.5     2,563.8     2,295.7    
Europe                                         429.9       855.9     1,116.6    
                                         -------     -------     -------
                                         2,730.4     3,419.7     3,412.3
                                         =======     =======     =======

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Note 5 - Restructuring and other non-recurring charges                          

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Electronic security services (i)              (232.5)      (21.4)          -    
Corporate (ii)                                  (4.8)      (12.8)       (4.5)   
                                          ------       -----        ----
                                           (237.3)      (34.2)       (4.5)
                                          ======       =====        ====

During 1995 the Company commenced a strategic review of its business            
operations and its corporate organizational structure with a view to            
developing a business strategy which would place the Company in a stronger      
position to deal with the changing business environment and challenges facing   
its core service businesses in the late 1990s.  During 1996 this strategic      
review process continued and was extended to include a significantly expanded   
agenda.                                                                         

(i)     As part of the strategic review the Company commenced an evaluation of  
the administrative, accounting, management information systems and              
technological infrastructures of its United States electronic security services 
division (the "Re-Engineering Project").  The Re-Engineering Project, which is  
on-going, is intended to modify and improve the entire structure of the         
business operations.  As a consequence of the Re-Engineering Project, and       
incorporating the effects of the acquisition of Alert Centre, Inc. ("Alert"),   
in each of the fourth quarters of 1996 and 1995 senior executive management     
approved a restructuring plan which resulted in a charge for restructuring and  
other non-recurring items in the United States electronic security services     
division of $131.6 million and $19.4 million, respectively.                     

The United States electronic security services division restructuring charge    
in 1996 was principally attributable to planned technological infrastructure    
enhancements to facilitate further consolidation of the Company's entire        
customer monitoring center network together with all related operations, which  
it is expected will be substantially completed by December 1997.  The           
restructuring charge included the write off of certain property, plant and      
equipment of $82.6 million, provision for idle property leases of $18.9         
million, the termination of certain contractual obligations and other           
settlement costs of $9.4 million, and other integration and restructuring       
costs of $20.7 million.  The amounts paid and charged in 1996 against the       
provisions for the termination of certain contractual obligations and other     
settlement costs, and against other integration and restructuring costs,        
amounted to $4.8 million and $4.3 million, respectively.                        

The United States electronic security services division restructuring charge    
in 1995 was principally attributable to the closure of the Parsippany, New      
Jersey and associated corporate offices, which will be substantially completed  
by March 1997.  Full implementation of the restructuring plan will result in    
the termination of approximately 250 employees of which approximately 180       
employees had been terminated by December 31, 1996.  Employee severance and     
other associated costs included in the restructuring charge amounted to $13.6   
million, the write off of certain property, plant and equipment amounted to     
$1.9 million, and other integration and restructuring costs amounted to $3.9    
million.  The amounts paid and charged in 1996 against the provisions for       
employee severance and other associated costs, and against other integration    
and restructuring costs, amounted to $7.1 million and $3.5 million,             
respectively.                                                                   

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During the fourth quarter of 1996, the Company commenced a strategic and        
detailed review of the electronic security services businesses acquired as      
part of the acquisition of ASH in September 1996.  In December 1996 senior      
executive management approved a restructuring plan which is intended to merge   
and integrate fully the ASH group into the ADT group by December 1997, and      
which resulted in a charge for restructuring and other non-recurring items in   
the United Kingdom and the United States electronic security services           
divisions of $68.6 million and $29.2 million, respectively.                     

The restructuring charge included the write off of certain property, plant and  
equipment of $13.2 million, provision for idle property leases of $22.5         
million, the termination of certain contractual obligations and other           
settlement costs of $35.2 million, and other integration and restructuring      
costs of $26.9 million.  The amounts paid and charged in 1996 against the       
provisions for the termination of certain contractual obligations and other     
settlement costs, and against other integration and restructuring costs,        
amounted to $7.2 million and $1.0 million, respectively.                        

As part of the strategic review, in 1996 the Company also commenced an          
evaluation of the customer monitoring center network in its Canadian            
electronic security services division which resulted in a charge for            
restructuring and other non-recurring items of $3.1 million.  The               
restructuring charge included the write off of certain property, plant and      
equipment of $1.3 million and provision for idle property leases of $1.8        
million, of which $0.2 million was paid and charged in 1996.                    

As part of the strategic review, in 1995 the Company also commenced an          
evaluation of the management information systems of its United Kingdom          
electronic security services division which resulted in a charge for            
restructuring and other non-recurring items in 1995 of $2.0 million             
principally relating to the write off of certain property, plant and equipment. 

(ii)    The effects of the Re-Engineering Project and the merger of the ASH     
group into the ADT group resulted in a charge for restructuring and other       
non-recurring items at the corporate level in 1996 of $4.8 million, comprising  
other integration and restructuring costs, of which $3.0 million was paid and   
charged in 1996.                                                                

During 1995 the Company also evaluated its group corporate structure, in        
particular in the United Kingdom.  As a result, in the fourth quarter of 1995,  
senior executive management approved a restructuring plan, which was            
substantially completed by December 1996, which resulted in a charge for        
restructuring and other non-recurring items at the corporate level of $12.8     
million.                                                                        

The corporate restructuring charge included the provision for idle property     
leases of $5.6 million, the termination of certain contractual obligations and  
other settlement costs of $4.8 million, and employee severance for four         
executives, all of whom were terminated during 1996, and other associated       
costs, of $2.4 million.  The amounts paid and charged in 1996 against the       
provisions in the aforementioned categories were $0.6 million, $4.8 million and 
$1.8 million, respectively.                                                     

The corporate restructuring charge in 1994 of $4.5 million was principally      
attributable to the Company's corporate administration in the United Kingdom    
and related to a provision for idle property leases.                            

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Note 6 - Charge for the impairment of long-lived assets                         

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Electronic security services (i)              (731.7)          -           -    
Vehicle auction services (ii)                  (13.0)          -           -    
                                          ------      ------      ------
                                          (744.7)          -           -
                                          ======      ======      ======

Effective January 1, 1996, the Company was required to adopt Statement of       
Financial Accounting Standards No. 121 "Accounting for the Impairment of        
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121").    
SFAS 121 prescribes a methodology for assessing and measuring an impairment     
loss that is significantly different from previous guidelines and procedures.   

SFAS 121 requires the recoverability of the carrying value of long-lived        
assets, primarily property, plant and equipment, and related goodwill, and      
other intangible assets, to be reviewed for impairment whenever events or       
changes in circumstances indicate that the carrying amount of an asset may not  
be fully recoverable.  Under SFAS 121 it is necessary to evaluate for and       
calculate an impairment loss at the lowest level of asset grouping for which    
there are identifiable cash flows.  Under SFAS 121, if an asset being tested    
for recoverability was acquired in a business combination accounted for using   
the purchase method, the goodwill that arose in the transaction is included     
in the impairment evaluation of that asset.                                     

SFAS 121 requires that an impairment loss is recognized when the carrying       
amount of an asset exceeds the sum of the estimated undiscounted future cash    
flows of the asset.  Under SFAS 121 an impairment loss is calculated as the     
difference between the carrying amount of the asset, including the related      
goodwill, and its estimated fair value.  The carrying amount of the related     
goodwill is eliminated before making any reduction in the carrying amount of    
any other impaired long-lived asset.                                            

Prior to the adoption of SFAS 121, the Company's policy was to evaluate for     
impairment of long-lived assets, including goodwill, on an aggregate basis for  
each business segment.  Management has determined that within the electronic    
security services division the lowest level of asset grouping referred to       
above can be determined on a country by country basis and, with effect from     
the first quarter of 1996, further split principally in terms of commercial     
and residential sectors.  The assets principally comprise subscriber systems    
installed at customers' premises, which are included in property, plant and     
equipment, and the related goodwill, and other intangible assets.  Within the   
vehicle auction services division the lowest level of asset grouping can be     
determined principally on an individual auction center basis, and the assets    
principally comprise land and real estate, which are included in property,      
plant and equipment, and the related goodwill.  Management has estimated the    
fair values referred to above by using an analysis of estimated discounted      
future cash flows as the best available estimate of fair value.  The basis of   
the calculation was the Company's business strategy, plans and financial        
projections, and an appropriate discount factor based on the Company's          
estimated cost of capital.                                                      

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Following the adoption of SFAS 121, in particular the change in methodology     
requiring the Company to evaluate assets at the lowest level of asset           
grouping, rather than on an aggregate basis, in the first quarter of 1996 the   
Company recorded an aggregate non-cash charge for the impairment of long-lived  
assets of $744.7 million, as a separate line item in the consolidated           
statements of income, with a consequential tax credit of $10.8 million.  The    
$744.7 million impairment charge comprised $731.7 million relating to the       
electronic security services division  and $13.0 million relating to the        
vehicle auction services division.                                              

(i)     The $731.7 million impairment charge in the electronic security         
services division comprised $397.1 million related to the ADT group and $334.6  
million related to the ASH group.                                               

The $397.1 million impairment charge in the electronic security services        
division of the ADT group related to an impairment in the carrying value of     
subscriber systems principally in the commercial sector, including related      
goodwill which principally arose on the acquisition of ADT Security Services    
in 1987 of $395.3 million and other assets of $1.8 million.  Since 1989 the     
Company's electronic security services operations in the residential sector     
have developed at a very rapid rate based principally on internally generated   
growth.  As a consequence, the Company's operations in the commercial sector,   
which were acquired principally in 1987, have now been complemented by a        
significant residential electronic security services operation.  This was a     
major factor in the Company's decision to commence the Re-Engineering Project   
in 1995, which is on-going.  In the context of the Re-Engineering Project and   
changes in the electronic security services business environment, the           
electronic security services operations have now been reorganized along         
separate commercial and residential business lines, rather than on an           
aggregate geographic basis, with effect from the first quarter of 1996, and     
which is fully supported by management and financial reporting systems that     
now record the results and cash flows of each sector separately.  When the      
financial projections and estimated future cash flows of the commercial sector  
were analyzed separately, they indicated that the carrying amount of the        
related assets may not be fully recoverable.  This is reflective of increased   
competition and other pricing factors as well as changes in the business        
environment.  Accordingly, upon adoption of SFAS 121 the Company evaluated the  
commercial sector assets for impairment with a resultant charge being           
recorded.  In the United States the impairment charge amounted to $303.4        
million.  In Canada, where the business performance has continued to be         
disappointing, the impairment charge amounted to $56.7 million.  In Europe,     
the impairment charge amounted to $37.0 million, principally due to the         
business performance of certain countries not meeting previous expectations.    

The $334.6 million impairment charge in the electronic security services        
division of the ASH group related to an impairment in the carrying value of     
subscriber systems of $121.0 million, and the carrying value of related         
goodwill and other intangibles of $213.6 million which principally arose on     
the acquisition of certain of the businesses of Modern Security Systems in      
1989 and 1990, API Security in 1989 and the Sonitrol Group in 1992.  The        
impairment charge amounted to $211.2 million and $123.4 million in the United   
Kingdom and the United States, respectively.  In both the United Kingdom and    
the United States, the adoption of SFAS 121 coincided with a reorganization of  
both the commercial and residential business sectors to address, in part,       
changes in the electronic security services business environment and            
performance similar to those being addressed by the ADT group.  In addition,    
the aggregate fair value of ADT common shares issued to ASH shareholders on     
merger was significantly less than ASH's consolidated net asset value.  It was  
for all these reasons that the Company reviewed the assets for impairment upon  
adoption of SFAS 121.                                                           

(ii)    The $13.0 million impairment charge in the vehicle auction services     
division related to an impairment in the carrying value of property and         
related improvements, including related goodwill which principally arose on     
the acquisition of ADT Automotive in 1987.                                      

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Note 7 - Gain (loss) on disposal of businesses                                  

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

United Kingdom and Continental European vehicle                                 
auction services businesses (i)                 -       (65.8)          - 
European electronic article                                                     
surveillance business (ii)                      -        31.4           - 
Other (iii)                                      1.7        (2.2)       (0.3)   
                                            ----       -----        ----
                                              1.7       (36.6)       (0.3)
                                            ====       =====        ====

(i)     In December 1995 the Company disposed of an interest in European        
Auctions (note 34) for an aggregate consideration of $334.9 million (note 18).  
The net loss on disposal of $65.8 million included $136.5 million relating      
to the write off of net unamortized goodwill and other intangibles (note        
17(ii)) and a $23.2 million charge related to cumulative currency translation   
adjustments.                                                                    

(ii)    In November 1995 the Company disposed of its entire European            
electronic article surveillance business for an aggregate consideration of      
$54.0 million, comprising cash of $48.6 million and deferred consideration of   
$5.4 million.  The net gain on disposal of $31.4 million included a $2.1        
million gain relating to cumulative currency translation adjustments.           

(iii)   During 1996 the Company disposed of a European electronic security      
services business operated by the ASH group for an aggregate cash               
consideration of $3.0 million.  The net gain on disposal amounted to $1.7       
million.                                                                        

During 1995 the Company disposed of certain of the European electronic          
security services operations and businesses operated by the ASH group for an    
aggregate consideration of $6.1 million, comprising cash of $5.9 million and    
deferred consideration of $0.2 million.  The net loss on disposal of $2.2       
million included $2.8 million relating to the write off of net unamortized      
goodwill and other intangibles (note 17(ii)) and a $1.1 million charge          
relating to cumulative currency translation adjustments.                        

During 1994 the Company disposed of its entire Australasian electronic          
security services businesses, and also disposed of certain of the North         
American electronic security services operations of the ADT group and the ASH   
group.  The aggregate consideration on these disposals amounted to $21.6        
million, comprising cash of $11.1 million and notes receivable of $10.5         
million, and the net loss on disposal of $0.3 million included $10.7 million    
relating to the write off of net unamortized goodwill and other intangibles.    

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Note 8 - Other income less expenses                                             

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Gains and losses arising from the ownership of:                                 
Short-term investments                          -           -         3.0 
Long-term investments (i)                    54.4        (5.0)       18.5 
Write off in value of associate (ii)               -           -       (30.7)   
Settlement gain (iii)                           65.0           -           -    
Gains and losses on currency transactions        9.7         0.9         2.1    
Other income less expenses - net                (0.3)       (0.9)        3.0    
                                           -----        ----        ----
                                            128.8        (5.0)       (4.1)
                                           =====        ====        ====

(i)     Realized gains and losses arising from the ownership of short-term and  
long-term investments are principally stated before carrying costs of           
interest, administrative and other expenses.  During 1996 gains arising from    
the ownership of long-term investments comprised a net gain of $53.4 million    
relating to the disposal in November 1996 of the Company's entire investment    
in Limelight Group plc, a United Kingdom quoted company, which was previously   
valued and accounted for by the Company at a nominal amount, a net gain of      
$1.2 million relating to the disposal of the Company's equity investment in     
Integrated Transport Systems Limited (notes 18 and 34) and other net losses of  
$0.2 million principally arising from the disposal of other non-core            
investments.                                                                    

During 1995 losses arising from the ownership of long-term investments          
comprised $5.1 million relating to the disposal, principally during the second  
quarter of 1995, of the Company's entire equity investments in Compagnie        
Generale de Protection et Securite SA ("CGPS") and Microtech Security (UK)      
Limited ("Microtech") which were held by the ASH group (note 18), and other     
net gains of $0.1 million principally arising from the disposal of other        
non-core investments.  The net loss on disposal of $5.0 million included $7.3   
million relating to the write off of net unamortized goodwill and other         
intangibles and a $1.1 million charge relating to cumulative currency           
translation adjustments.                                                        

During 1994 gains arising from the ownership of long-term investments           
comprised $4.2 million relating to the disposal of the Company's entire equity  
investment in Nu-Swift plc, a United Kingdom quoted company, and other net      
gains of $14.3 million principally arising from the disposal of other non-core  
investments.                                                                    

(ii)    The write off in value of associate in 1994 related to the Company's    
entire equity investment in Arius, Inc. ("Arius"), a United States unquoted     
company, which was held by the ASH group.  A detailed assessment of the         
investment in Arius was carried out during 1994 and as a result a net write     
off of $30.7 million was recorded, of which $26.5 million related to the write  
off of net unamortized goodwill and other intangibles and $2.9 million related  
to other provisions.  During 1995 Arius went into voluntary liquidation.        

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(iii)   During 1991 a lengthy review and evaluation of the businesses and       
assets acquired in 1990 in respect of Britannia Security Group PLC              
("Britannia") was undertaken by the Company.  This review revealed that, at the 
time of the acquisition of Britannia by ADT certain assets, particularly        
subscriber systems installed at customer premises, had been included in the     
consolidated financial statements of Britannia at values materially in excess   
of their net realizable value.  During 1992 ADT commenced legal proceedings     
against Britannia's auditors at the time of acquisition, BDO Binder Hamlyn      
("BDO"), to seek recovery of the damages suffered.  In December 1995 the High   
Court of Justice in England awarded damages of approximately $160 million       
(including interest) against BDO, plus the reimbursement of certain legal       
costs incurred in connection with the litigation.  BDO then appealed against    
the judgment.  At December 31, 1995 ADT did not recognize the award of any      
damages in its consolidated statements of income and had deferred certain       
legal costs incurred in connection with the litigation amounting to $11.1       
million in order to match these costs with the award when recognized.  These    
deferred costs were included in other long-term assets (note 20).               

In December 1996 ADT and BDO entered into a settlement agreement, subject to    
completion of certain additional documentation which was signed in February     
1997, which included the payment to ADT of $77.5 million in cash (included in   
other current assets (note 15)) together with a further deferred payment of     
$8.6 million, in full and final settlement of the aforementioned proceedings,   
including the judgment, accrued interest and costs.  As a result of the         
settlement BDO have withdrawn their appeal.  The net gain arising on this       
settlement amounted to $69.7 million, of which $65.0 million was included in    
other income less expenses and $4.7 million was included in interest income.    

Note 9 - Income taxes                                                           

(i)     The provision for income taxes in the consolidated statements of        
income was as follows:                                                          

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Current income taxes:                                                           
US                                              (6.5)       (3.1)       (4.6)   
Non US                                         (11.2)       (6.6)       (5.4)   
                                           -----       -----       -----
                                            (17.7)       (9.7)      (10.0)
                                           -----       -----       -----

Deferred income taxes: (note 25)                                                
US (principally federal income taxes)           20.9       (18.0)      (22.6)   
Non US                                          18.6        (0.4)       (2.3)   
                                           -----       -----       -----
                                             39.5       (18.4)      (24.9)
                                           -----       -----       -----
                                             21.8       (28.1)      (34.9)
                                           =====       =====       =====

US current income taxes in 1996 comprise federal and state income taxes, and    
in 1995 and 1994 principally comprise state income taxes.                       

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(ii)    (Loss) income before income taxes included the following components:    

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

US (loss) income                              (485.6)       59.5        53.8    
Non US (loss) income                          (222.9)       (0.4)       63.7    
                                          ------        ----       -----
(Loss) income before income taxes             (708.5)       59.1       117.5    
                                          ======        ====       =====

(iii)   The reconciliation between notional US federal income taxes at the      
statutory rate on consolidated (loss) income before income taxes and the        
Company's income tax provision was as follows:                                  

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Notional US federal income taxes at the                                         
statutory rate                              248.0       (20.7)      (41.1)
Adjustments to reconcile to the Company's                                       
income tax provision:                                                     
US state income tax provisions, net             (3.1)       (2.7)       (3.2)   
Non US net (losses) earnings                   (70.6)       (7.1)       14.6    
SFAS 121 impairment                           (150.2)          -           -    
Utilization and/or recognition of tax loss                                      
carryforwards and other items                (2.3)        2.4        (5.2)
                                          ------        ----       -----
Income tax provision                            21.8       (28.1)      (34.9)   
                                          ======        ====       =====

Note 10 - Loss from discontinued operations                                     

During 1994 the Company disposed of all its remaining non-core businesses,      
principally the Insight Travel Group.  The Company no longer has any interests  
in non-core businesses.  The aggregate cash consideration on these disposals    
amounted to $11.2 million  and the net loss amounted to $3.7 million, which     
included $19.1 million relating to the write off of net unamortized goodwill    
and other intangibles.  The net income from operations for 1994 amounted to     
$0.4 million on net sales of $80.6 million.                                     

Note 11 - Extraordinary items                                                   

During 1996 and 1995 the Company reacquired in the market certain of its        
senior subordinated notes (note 23(ii)), which was financed from cash on hand.  
Extraordinary items included the loss arising on reacquisition of $0.9 million  
(1995 - $0.9 million) and the write off of net unamortized deferred             
refinancing costs of $0.5 million (1995 - $0.8 million) relating to the early   
extinguishment of certain amounts outstanding under the senior subordinated     
notes, and were stated net of applicable income taxes of $0.2 million (1995 -   
$0.2 million).                                                                  

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In September 1996 the Company repaid in full all amounts owed by the ASH group  
under its senior notes and bank credit agreement (note 23(vi)), which were      
subsequently cancelled, and which was financed from cash on hand and loans      
drawn under the revolving bank credit agreement.  Extraordinary items included  
the loss arising on repayment of $4.2 million and the write off of net          
unamortized deferred refinancing costs of $0.4 million relating to the early    
extinguishment of all amounts outstanding under the senior notes and bank       
credit agreement owed by the ASH group, with no consequential tax effect.       

In December 1996 the Company gave notice to all convertible capital bond        
holders that all of the outstanding capital bonds owed by the ASH group would   
be fully redeemed by the Company, and subsequently cancelled (note 23(v)), and  
which was financed from cash on hand and amounts drawn down under the sterling  
denominated bank credit facility (note 23(vii)).  Extraordinary items included  
the write off of net unamortized deferred refinancing costs of $1.6 million     
relating to the early extinguishment of all amounts outstanding under the       
convertible capital bonds owed by the ASH group, with no consequential tax      
effect.                                                                         

In December 1996 the Company entered into a new bank credit agreement, subject  
to completion of certain additional documentation which was signed in January   
1997, which replaced in full its previous bank credit agreement and which was   
subsequently cancelled (note 23(iv)).  Extraordinary items included the write   
off of net unamortized deferred refinancing costs of $1.5 million relating to   
the early extinguishment of all amounts outstanding under the bank credit       
agreement owed by the ADT group, and were stated net of applicable income       
taxes of $0.5 million.                                                          

In July 1995 the Company repaid in full all amounts owed by the ADT group       
under its previous bank credit agreement, which was subsequently cancelled.     
The Company funded the repayment from the net proceeds of the issue of its      
Liquid Yield Option Notes (note 23(iii)).  Extraordinary items included the     
write off of net unamortized deferred refinancing costs of $12.8 million        
relating to the early extinguishment of all amounts outstanding under the       
previous bank credit agreement owed by the ADT group, and were stated net of    
applicable income taxes of $4.5 million.                                        

Note 12 - (Loss) earnings per common share                                      

The calculation of primary (loss) earnings per common share was based on the    
weighted average of 137,114,415 (1995 - 138,283,458; 1994 - 136,148,361)        
common shares in issue during the year which in 1996 did not allow for the      
allotment of common shares under executive share option schemes, which are      
considered common stock equivalents, because their effect was anti-dilutive as  
a consequence of the net loss for the year.  Common stock equivalents included  
in the weighted average number of common shares in issue during 1995 and 1994   
were 2,921,286 and 2,503,059, respectively.  Primary (loss) earnings per        
common share from continuing operations was based on adjusted net loss from     
continuing operations available to common shareholders of $687.0 million (1995  
- $30.7 million net income; 1994 - $69.3 million net income).                   

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Note 13 - Accounts receivable - net                                             

At December 31                                              1996        1995    
                                                          $m          $m

Trade accounts receivable                                  229.2       213.4    
Less:  allowance for doubtful receivables                  (18.5)      (17.0)   
                                                       -----       -----
                                                       210.7       196.4
                                                       =====       =====

Note 14 - Inventories                                                           

At December 31                                              1996        1995    
                                                          $m          $m

Raw materials and consumables                                8.6         8.8    
Work in process                                             18.9        14.1    
Finished goods                                              11.7        15.1    
                                                       -----       -----
                                                        39.2        38.0
                                                       =====       =====

Note 15 - Prepaid expenses and other current assets                             

At December 31                                              1996        1995    
                                                          $m          $m

Prepaid expenses                                            10.9        11.6    
Other current assets                                       106.1        22.9    
                                                       -----       -----
                                                       117.0        34.5
                                                       =====       =====

At December 31, 1996 other current assets included $77.5 million of settlement  
gain proceeds (note 8(iii)).                                                    

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Note 16 - Property, plant and equipment - net                                   

At December 31                                              1996        1995    
                                                          $m          $m
Cost:                                                                           
Property and related improvements                          290.7       271.6    
Subscriber systems                                       1,977.5     1,874.0    
Other plant and equipment                                  214.8       199.0    
                                                     -------     -------
Total cost                                               2,483.0     2,344.6    
                                                     -------     -------
Accumulated depreciation:                                                       
Property and related improvements                           56.0        41.5    
Subscriber systems                                         762.0       614.2    
Other plant and equipment                                  151.4       117.6    
                                                     -------     -------
Total accumulated depreciation                             969.4       773.3    
                                                     -------     -------

Net book values                                          1,513.6     1,571.3    
                                                     =======     =======

Note 17 - Goodwill and other intangibles - net                                  
                                                        1996        1995
                                                          $m          $m
Cost:                                                                           
At January 1                                             1,290.6     1,345.2    
SFAS 121 impairment (note 6)                              (825.6)          -    
Acquisitions (i)                                            44.9       123.0    
Disposals (ii)                                                 -      (174.1)   
Currency translation adjustments                               -        (3.5)   
                                                     -------     -------
At December 31                                             509.9     1,290.6    
                                                     -------     -------
Accumulated amortization:                                                       
At January 1                                               237.0       233.7    
SFAS 121 impairment (note 6)                              (203.7)          -    
Charge for the year                                         18.6        38.9    
Disposals (ii)                                                 -       (34.8)   
Currency translation adjustments                               -        (0.8)   
                                                     -------     -------
At December 31                                              51.9       237.0    
                                                     -------     -------
Net book values:                                                                
At December 31                                             458.0     1,053.6    
                                                     =======     =======

(i)     In February 1996 the Company acquired the remaining 24.0 per cent of    
the outstanding voting share capital of Alert, an electronic security services  
company in the United States, not already owned by the Company, for an          
aggregate cash consideration of $25.5 million, which was financed from cash on  
hand.  The amount of goodwill arising from this acquisition was $10.3 million.  
During 1996 the Company purchased other intangibles, principally customer       
contracts, in North America and Europe for an aggregate cash consideration of   
$34.6 million which was financed from cash on hand.                             

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In December 1995 the Company acquired 76.0 per cent of the outstanding voting   
share capital of Alert, for an aggregate cash consideration of $69.0 million,   
which was financed from cash on hand.  The amount of goodwill and other         
intangibles arising from this acquisition was $80.1 million and $40.0 million,  
respectively.  In January 1995 the Company acquired a vehicle auction services  
business in Belgium for an aggregate cash consideration of $4.2 million, which  
was disposed of in December 1995 as part of the disposal by the Company of an   
interest in European Auctions (note 17(ii)).  During 1995 the Company also      
acquired several small electronic security services businesses in the United    
States and Europe for an aggregate cash consideration of $1.0 million.          

These acquisitions have been accounted for using the purchase method.           
Accordingly, the respective purchase prices have been allocated to assets       
acquired and liabilities assumed based on their preliminary estimated fair      
values.  These allocations resulted in goodwill and other intangibles of $44.9  
million arising during the year (1995 - $123.0 million).                        

(ii)    In December 1995 the Company disposed of an interest in European        
auctions (notes 18 and 34).  Net unamortized goodwill and other intangibles     
on disposal of $136.5 million was included in the loss on disposal of           
businesses (note 7(i)).  During 1995 the Company disposed of certain of the     
European electronic security services operations and businesses operated by     
the ASH group.  The net unamortized goodwill and other intangibles on           
disposal of $2.8 million was included in the gain on disposal of businesses     
(note 7(iii)).                                                                  

(iii)   The accumulated cost, accumulated amortization and net book values of   
the goodwill balance included within goodwill and other intangibles at          
December 31, 1996 amounted to $421.0 million, $43.0 million and $378.0          
million, respectively (1995 - $1,120.1 million, $206.9 million and $913.2       
million, respectively).                                                         

Note 18 - Investment in and loans to associate                                  

At December 31                                              1996        1995    
                                                          $m          $m

Vendor Note                                                    -        83.9    
Shareholder Loan Notes                                         -        13.9    
                                                       -----       -----
                                                           -        97.8
Less:  unamortized discount                                    -        (9.9)   
                                                       -----       -----

                                                           -        87.9
Investment in ordinary share capital                           -         0.9    
                                                       -----       -----

                                                           -        88.8
                                                       =====       =====

In December 1995 the Company disposed of an interest in European Auctions to    
Integrated Transport Systems Limited ("ITS") (note 34) for an aggregate         
consideration of $334.9 million.                                                

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The aggregate consideration received by the Company on closing was comprised    
of cash of $235.1 million, $187.6 million aggregate principal amount at         
maturity of a subordinated deep discount zero coupon loan note issued by ITS    
maturing in March 2004 ("Vendor Note"), $31.1 million aggregate principal       
amount at maturity of subordinated deep discount zero coupon loan notes issued  
by ITS maturing in March 2004 ("Shareholder Loan Notes"), and a 43.1 per cent   
interest in the ordinary share capital of ITS at an issue price of $2.0         
million.                                                                        

The Vendor Note is a sterling loan note with an issue price of $83.9 million,   
reflecting a yield to maturity of 10.0 per cent per annum, and was valued by    
the Company at $74.6 million.  There are no periodic payments of interest.      
The Vendor Note is a subordinated, non-collateralized obligation of ITS and is  
transferrable, under certain conditions, after December 1998.  The discount on  
the Vendor Note of $9.3 million will be amortized on a basis linked to the      
yield to maturity over the life of the loan note as a credit to interest        
income, and represents the difference between the stated yield to maturity and  
the prevailing market yield to maturity of approximately 11.5 per cent per      
annum, for similar types of loan notes at the time the Vendor Note was issued   
in December 1995.  The interest yield and discount amortization for 1996        
amounted to $8.6 million and $0.3 million, respectively.                        

The Shareholder Loan Notes are transferrable sterling loan notes with an issue  
price of $13.9 million, reflecting a yield to maturity of 10.0 per cent per     
annum, and were valued by the Company at $13.3 million.  There are no periodic  
payments of interest.  The Shareholder Loan Notes are subordinated,             
non-collateralized obligations of ITS and are also subordinated to the Vendor   
Note.                                                                           

The aggregate fair market value of the Vendor Note and Shareholder Loan Notes   
at December 31, 1995 amounted to $87.9 million, and was based on discounting    
the loan notes at estimated current sterling interest rates on similar term     
financial instruments.                                                          

The 43.1 per cent interest in the ordinary share capital of ITS was valued and  
accounted for by the Company at $0.9 million.                                   

In February 1996 the Company disposed of its entire interest in Shareholder     
Loan Notes with an issue price of $13.9 million and valued by the Company at    
$13.3 million (net of unamortized discount of $0.6 million), and 33.1 per cent  
of the ordinary share capital of ITS valued by the Company at $0.9 million,     
for an aggregate cash consideration of $15.4 million.  The net gain arising on  
the transaction amounted to $1.2 million which was included in other income     
less expenses (note 8(i)).                                                      

As a result of the above transaction, the Company now holds a 10.0 per cent     
interest in the ordinary share capital of ITS, valued and accounted for by the  
Company at a nominal amount, together with the Vendor Note, which at December   
31, 1996 is disclosed as a long-term investment (note 19) and has been          
accounted for at its amortized cost.                                            

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The movement in the carrying value of investment in and loans to associate      
since January 1, 1995 has been as follows:                                      

                                                        1996        1995
                                                          $m          $m

At January 1                                                88.8        12.6    
Acquisitions                                                   -        88.8    
Disposals                                                  (14.2)      (12.6)   
Reclassifications                                          (74.6)          -    
                                                       -----       -----

At December 31                                                 -        88.8    
                                                       =====       =====

During 1995 the Company disposed of its entire equity investments in CGPS, a    
French unquoted company, and Microtech, a United Kingdom unquoted company, for  
an aggregate consideration of $8.6 million comprising cash of $7.8 million and  
notes receivable of $0.8 million.  The net loss on disposal of $5.1 million,    
including $7.3 million relating to the write off of net unamortized goodwill    
and other intangibles and a $1.1 million charge relating to cumulative          
currency translation adjustments, was included in other income less expenses    
(note 8(i)).                                                                    

Note 19 - Long-term investments                                                 

At December 31                                              1996        1995    
                                                          $m          $m

Vendor Note (note 18)                                      102.0           -    
Less:  unamortized discount                                (10.0)          -    
                                                       -----       -----

                                                        92.0           -
Other long-term investments                                  8.6         2.0    
                                                       -----       -----

                                                       100.6         2.0
                                                       =====       =====

The fair market value of the Vendor Note at December 31, 1996 amounted to       
$89.7 million, and is based on discounting the loan note at estimated current   
sterling interest rates on similar term financial instruments.  The aggregate   
fair market value of other long-term investments at December 31, 1996 amounted  
to $8.6 million (1995 - $2.0 million) and is based on estimates made by the     
Company.                                                                        

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Note 20 - Other long-term assets                                                

At December 31                                              1996        1995    
                                                          $m          $m

Deferred refinancing costs                                  19.4        27.1    
Other long-term assets                                      56.0        57.1    
                                                       -----       -----

                                                        75.4        84.2
                                                       =====       =====

In connection with the refinancing of certain long-term debt obligations of     
the Company certain fees and expenses were incurred.  These refinancing costs   
are being amortized as interest expense through the consolidated statements     
of income on a straight line basis over the terms of the respective lives of    
the Company's various long-term debt obligations.  The refinancing costs        
amortization for the year amounted to $3.7 million (1995 - $5.3 million; 1994   
- $5.7 million).  During the year $4.0 million (1995 - $13.6 million; 1994 -    
nil) of net unamortized deferred refinancing costs, relating to the early       
extinguishment of certain amounts outstanding under the Company's long-term     
debt obligations, were written off as extraordinary items in the consolidated   
statements of income (note 11).                                                 

Note 21 - Short-term debt                                                       

At December 31                                              1996        1995    
                                                          $m          $m

Bank and acceptance facilities                              50.6        39.4    
Current portion of long-term debt (note 23)                158.6         5.5    
                                                       -----       -----

                                                       209.2        44.9
                                                       =====       =====

The average rate of interest on short-term debt outstanding at December 31,     
1996 was 7.8 per cent (1995 - 7.9 per cent).  Short-term debt is generally      
repayable on demand or at an interest payment date, and is non-collateralized   
except for $0.5 million of bank and acceptance facilities in 1995, and $5.5     
million of the current portion of long-term debt in 1995.                       

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Note 22 - Other current liabilities                                             

At December 31                                              1996        1995    
                                                          $m          $m

Accruals                                                    70.6        78.5    
Payroll and employee benefits                               58.1        53.5    
Payments received on account                                17.1        10.1    
Income taxes                                                15.6        12.0    
Interest payable                                            23.7        25.4    
Short-term restructuring, disposition and other provisions  95.6        37.4    
Other current liabilities                                   12.9        10.3    
                                                     -------     -------

                                                       293.6       227.2
                                                     =======     =======
Note 23 - Long-term debt                                                        

At December 31                                              1996        1995    
                                                          $m          $m

Senior notes (i)                                           250.0       250.0    
Senior subordinated notes (ii)                             294.1       317.2    
Liquid Yield Option Notes (iii)                            326.8       306.8    
Revolving bank credit agreement (iv)                        83.0        15.0    
Convertible capital bonds (v)                               75.6        68.7    
Bank credit agreement - ASH (vi)                               -       126.2    
Senior notes - ASH (vi)                                        -        56.8    
Other (vii)                                                 39.2        39.6    
                                                     -------     -------

                                                     1,068.7     1,180.3
Less: current portion (note 21)                           (158.6)       (5.5)   
                                                     -------     -------

                                                       910.1     1,174.8
                                                     =======     =======

(i)     The $250.0 million 8.25 per cent senior notes due August 2000 were      
issued in August 1993, through a public offering, by ADT Operations, Inc., a    
company incorporated in the United States and an indirect wholly owned          
subsidiary of ADT, and are guaranteed on a senior basis by ADT and certain      
subsidiaries of ADT Operations, Inc.  The senior notes are not redeemable       
prior to maturity and interest is payable semi-annually.  The indentures        
governing the senior notes contain certain covenants including limitations on   
indebtedness, limitations on certain payments, including dividends on the       
Company's common shares, and compliance with various financial and operating    
covenants and prohibitions, and certain change in control provisions.  The      
senior notes are non-collateralized senior obligations of ADT Operations, Inc.  
ranking pari passu in right of payment with all other existing and future       
senior indebtedness of ADT Operations, Inc. including indebtedness under the    
revolving bank credit agreement referred to in (iv) below.                      

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(ii)    The $350.0 million 9.25 per cent senior subordinated notes due August   
2003 were issued in August 1993, through a public offering, by ADT Operations,  
Inc., and are guaranteed on a senior subordinated basis by ADT.  The senior     
subordinated notes are redeemable in whole or in part, at the option of ADT     
Operations, Inc., at any time after August 1998 at the following redemption     
prices:  during the twelve month period beginning (a) August 1998 at 103.75     
per cent (b) August 1999 at 102.50 per cent (c) August 2000 at 101.25 per       
cent, and thereafter at 100.00 per cent of the principal amount.  Interest is   
payable semi-annually.  The indentures governing the senior subordinated notes  
contain certain covenants as set out for the senior notes in (i) above.  The    
senior subordinated notes are non-collateralized, senior subordinated           
obligations of ADT Operations, Inc. ranking pari passu with, or senior in       
right of payment to, all other existing and future indebtedness of ADT          
Operations, Inc. that is expressly subordinated to senior indebtedness of ADT   
Operations, Inc.  During 1996 the Company reacquired in the market $23.1        
million (1995 - $32.8 million) face value of the senior subordinated notes at   
a purchase cost of $24.0 million (1995 - $33.7 million) which was financed      
from cash on hand.  The loss arising on reacquisition of $0.9 million (1995 -   
$0.9 million), and related costs of $0.5 million (1995 - $0.8 million), was     
included in extraordinary items (note 11).                                      

(iii)   In July 1995 ADT Operations, Inc. issued $776,250,000 aggregate         
principal amount at maturity of its zero coupon subordinated Liquid Yield       
Option Notes ("Notes") maturing July 2010.  The net proceeds of the issue       
amounted to $287.4 million which was used to repay in full all amounts          
outstanding under ADT Operations, Inc.'s previous bank credit agreement, which  
was subsequently cancelled.  The issue price per Note was $383.09, being        
38.309 per cent of the principal amount of $1,000 per Note at maturity,         
reflecting a yield to maturity of 6.5 per cent per annum (computed on a         
semi-annual bond equivalent basis).  There are no periodic payments of          
interest.  The discount amortization on the Notes is being charged as interest  
expense through the consolidated statements of income on a basis linked to the  
yield to maturity.  The Notes discount amortization for 1996 amounted to $20.3  
million (1995 - $9.4 million).  Each Note is exchangeable for common shares of  
ADT at the option of the holder at any time prior to maturity, unless           
previously redeemed or otherwise purchased by ADT Operations, Inc., at an       
exchange rate of 28.23 common shares per Note.  During 1996 619 Notes with a    
carrying value of $0.3 million were exchanged, at the option of the holders,    
for 17,472 ADT common shares (note 30).  Any Note will be purchased by ADT      
Operations, Inc. at the option of the holder as of July 2002 for a purchase     
price per Note of $599.46.  At this time, if the holder exercises the option,   
ADT has the right to deliver all or a portion of the purchase price in the      
form of common shares of ADT.  Beginning July 2002 the Notes are redeemable     
for cash at any time at the option of ADT Operations, Inc., in whole or in      
part, at redemption prices equal to the issue price plus accrued original       
issue discount to the date of redemption.  The Notes are guaranteed on a        
subordinated basis by ADT.   If, on or prior to maturity, there is a change in  
control, the holder has the right to require ADT Operations, Inc. to purchase   
the Notes at the change in control purchase price.                              

(iv)    In August 1995 ADT Operations, Inc. entered into a new $300 million     
revolving bank credit agreement which replaced in full its previous bank        
credit agreement.  The new agreement has a term of five years and is            
guaranteed on a senior basis by ADT and certain subsidiaries of ADT             
Operations, Inc.  Amounts available under this facility are available for       
borrowing and reborrowing (or issuance and reissuance in the case of letters    
of credit up to a maximum of $100 million), subject to certain conditions at    
that time, until June 2000 at which time all amounts are repayable in full.     
At December 31, 1996 $83.0 million (1995 - $15.0 million) was drawn down under  
the agreement, which has been classified in the current portion of long-term    
debt, plus letters of credit amounting to $81.1 million (1995 - $81.0 million)  
which have been issued and have terms of less than one year.  The Company       
utilizes letters of credit to back certain financing arrangements and           
insurance policies as well as for trade purposes.  The letters of credit        
approximately reflect fair value as a condition of their underlying purpose.    
The Company expects the counterparties to fully perform under the terms of the  
agreements.                                                                     

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Amounts drawn down under the revolving bank credit agreement bear interest at   
a floating rate equal, at the option of ADT Operations, Inc., to either the     
alternative base rate plus a margin or the reserve adjusted LIBO rate plus a    
margin.  The average rate of interest at December 31, 1996 was 6.5 per cent     
(1995 - 7.6 per cent).                                                          

The revolving bank credit agreement contains certain financial and operating    
covenants, including restrictions on the Company's ability to incur additional  
indebtedness, limitations on certain payments, including dividends on the       
common shares of ADT and ADT Operations, Inc., and certain other financial      
covenants, including a minimum cash flow coverage ratio, a minimum debt to      
total capitalization ratio and a minimum level of shareholders' equity, and     
certain change in control provisions.                                           

In December 1996 ADT Operations, Inc. entered into a new $200 million           
revolving bank credit agreement, subject to completion of certain additional    
documentation which was signed in January 1997, which replaced in full its      
previous bank credit agreement, and which was subsequently cancelled.  The new  
agreement has a term of one year and is guaranteed on a senior basis by ADT     
and certain subsidiaries of ADT Operations, Inc.  Amounts available under this  
new facility are available for borrowing and reborrowing (or issuance and       
reissuance in the case of letters of credit up to a maximum of $100 million),   
subject to certain conditions at that time, until January 1998 at which time    
all amounts are repayable in full.  The interest rates and financial and        
operating covenants in place under the new facility are substantially the same  
as those referred to above for the previous bank credit agreement.              

(v)     The 9.5 per cent sterling denominated convertible capital bonds due     
July 2006 were issued by ASH Capital Finance (Jersey) Limited, a company        
incorporated in Jersey and an indirect wholly owned subsidiary of ADT, and are  
unconditionally and irrevocably guaranteed on a non-collateralized and          
subordinated basis by ADT.  Interest is payable semi-annually.  The capital     
bonds are convertible, at the option of the holder, into fully paid 2.0 per     
cent (fixed cumulative dividend) exchangeable redeemable preference shares in   
ASH Capital Finance (Jersey) Limited with a nominal value of one pence each.    
The preference shares are unconditionally and irrevocably guaranteed on a       
non-collateralized and subordinated basis by ADT.  The preference shares are    
redeemable at their paid up value of  Pound Sterling 1 each and they are also   
exchangeable, at the option of the holder, for fully paid common shares of ADT  
at a price of  Pound Sterling 76.66 per common share, the price of which is     
subject to adjustment under certain circumstances.  The capital bonds are       
unconditionally and irrevocably guaranteed on a non-collateralized and          
subordinated basis by ASH, and were formerly convertible into ordinary shares   
of ASH.  Under the terms of the issue, ADT can require conversion of any        
outstanding capital bond if 85 per cent of the issue has been previously        
converted or purchased and cancelled, in which case the bond holders may elect  
for redemption in lieu of conversion.  On or after June 1, 1996, ADT may        
exercise a call option at 100 per cent of the aggregate paid up amounts of the  
capital bonds outstanding.                                                      

In December 1996 ASH Capital Finance (Jersey) Limited gave notice to all bond   
holders that in January 1997 it would redeem all of the capital bonds then      
outstanding at a price equating to the denomination of each capital bond        
together with all accrued interest due.  Accordingly, in January 1997 the       
capital bonds were fully redeemed at their carrying amount, which was financed  
from cash on hand and amounts drawn down under the sterling denominated bank    
credit facility, as set out in (vii) below, and at December 31, 1996 have been  
classified in the current portion of long-term debt.                            

(vi)    In September 1996 the Company repaid in full all amounts owed by the    
ASH group under its senior notes and bank credit agreement, which were          
subsequently cancelled, and which was financed from cash on hand and loans      
drawn under the revolving bank credit agreement.  The loss arising on           
repayment of $4.2 million, and related costs of $0.4 million, was included in   
extraordinary items (note 11).                                                  

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During 1994 ASH issued $60.7 million of its 8.28 per cent senior notes due      
January 1998 of which $5.6 million was in respect of yield maintenance.  The    
senior notes were collateralized obligations of the ASH group.  The yield       
maintenance amortization on the senior notes has been charged as interest       
expense through the consolidated statements of income.  The yield maintenance   
amortization for 1996 amounted to $1.5 million (1995 - $1.1 million; 1994 -     
$0.6 million).  The effective rate of interest including yield maintenance was  
10.7 per cent.                                                                  

During 1995 ASH entered into a bank credit agreement totalling approximately    
$134 million with a maturity date in January 1998.  The amounts drawn under     
the agreement were collateralized obligations of the ASH group and bore         
interest principally at LIBO rate plus a margin.                                

(vii)   Other long-term debt principally represents revolving facilities with   
various banks falling due for repayment in 1999 bearing interest at a floating  
rate equal, at the option of the Company, to either the alternative base rate   
plus a margin or the reserve adjusted LIBO rate plus a margin.   The average    
rate of interest at December 31, 1996 was 7.5 per cent (1995 - 6.9 per cent).   
In addition, at December 31, 1996 $0.6 million (1995 - $2.0 million) in         
letters of credit have been issued under certain of these facilities and have   
terms of less than one year.                                                    

In January 1997 the Company entered into a sterling denominated bank credit     
facility which is repayable on demand.  The amount drawn down under the         
facility amounted to $26 million which was used to repay, in part, the amounts  
owed under the convertible capital bonds in (v) above.  The facility is         
guaranteed by ADT and certain of its subsidiaries.  Interest is payable at      
LIBO rate plus a margin.                                                        

In March 1997 the Company entered into a new $154 million sterling denominated  
bank credit facility of which $146 million is a term loan facility and $8       
million is a revolving credit facility.  The term loan facility was fully       
drawn down and, in part, was used to repay in full the $26 million drawn down   
under the sterling denominated bank credit facility referred to above.  The     
new facility has a term of five years and is guaranteed by ADT and certain of   
its subsidiaries.  Interest is payable at LIBO rate plus a margin.              

The average rate of interest on all long-term debt during the year was 8.0 per  
cent (1995 - 8.2 per cent; 1994 - 8.4 per cent).                                

Based on estimated interest rates currently available to the Company for        
long-term debt with similar terms and average maturities, the fair value of     
all long-term debt at December 31, 1996 amounted to approximately $1,119        
million (1995 - approximately $1,241 million).                                  

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The maturities and installments with respect to long-term debt outstanding at   
December 31, 1996 are as follows:                                               

                                                                      $m

Year ending December 31                         1997                   158.6    
                                            1998                     0.9
                                            1999                    34.5
                                            2000                   251.7
                                            2001                     0.9
                                      Thereafter                   622.1
                                                                 -------
                                                                 1,068.7
                                                                 =======

Note 24 - Deferred revenue                                                      

Deferred revenue is comprised of all subscriber billings for services not yet   
rendered.                                                                       

Note 25 - Deferred income taxes                                                 

The movement in deferred income taxes since January 1, 1994 has been as         
follows:                                                                        

                                            1996        1995        1994
                                              $m          $m          $m

At January 1                                   142.4       123.5        95.3    
(Credit) charge for the year (note 9(i))       (39.5)       18.4        24.9    
Extraordinary items (note 11)                   (0.7)       (4.7)          -    
Eliminated on disposals                            -        (3.3)          -    
Currency translation adjustments                (0.7)        0.7        (0.2)   
Reclassifications                              (10.0)        7.8         3.5    
                                           -----       -----       -----
At December 31                                  91.5       142.4       123.5    
                                           =====       =====       =====

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The significant temporary timing differences and tax loss carryforwards that    
gave rise to the deferred income tax balance at December 31, 1996 were as       
follows:                                                                        

                                              US      Non US       Total
                                              $m          $m          $m
Liabilities:                                                                    
Depreciation                                   864.8        72.6       937.4    
Other                                            6.9        15.2        22.1    
                                          ------      ------      ------
                                           871.7        87.8       959.5
                                          ------      ------      ------

Assets:                                                                         
Tax operating loss carryforwards               436.6        99.2       535.8    
Provisions for estimated costs and expenses    143.7        57.2       200.9    
Interest expense                               147.9           -       147.9    
Post-retirement benefit obligations             78.6           -        78.6    
Depreciation                                       -        66.2        66.2    
                                          ------      ------      ------
                                           806.8       222.6     1,029.4
Valuation allowance                           (163.6)     (155.8)     (319.4)   
                                          ------      ------      ------
                                           643.2        66.8       710.0
                                          ------      ------      ------
Gross deferred income tax liability            228.5        21.0       249.5    
                                          ------      ------      ------

Deferred income tax liability at                                                
statutory tax rates                          80.0        11.5        91.5 
                                          ======      ======      ======

The US tax operating loss carryforwards at December 31, 1996 expire as follows: 
                                                                      $m

Year ending December 31                         1999                     6.8    
                                            2000                     4.1
                                            2001                    24.2
                                            2002                    18.3
                                            2003                     7.5
                                            2004                    86.4
                                            2005                   144.4
                                            2006                   107.2
                                            2007                    24.7
                                            2008                    13.0
                                                                   -----
                                                                   436.6
                                                                   =====

No provision has been made for deferred income taxes on undistributed earnings  
of subsidiaries ($655.9 million at December 31, 1996) which are required to     
finance their continuing operations.                                            

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The significant temporary timing differences and tax loss carryforwards that    
gave rise to the deferred income tax balance at December 31, 1995 were as       
follows:                                                                        

                                              US      Non US       Total
                                              $m          $m          $m
Liabilities:                                                                    
Depreciation                                   857.9       124.4       982.3    
Other                                            5.2        14.5        19.7    
                                          ------      ------     -------
                                           863.1       138.9     1,002.0
                                          ------      ------     -------

Assets:                                                                         
Tax operating loss carryforwards               428.9        94.5       523.4    
Provisions for estimated costs and expenses     69.2        12.5        81.7    
Interest expense                                99.6           -        99.6    
Post-retirement benefit obligations             66.5           -        66.5    
                                          ------      ------     -------
                                           664.2       107.0       771.2
Valuation allowance                           (120.0)      (49.3)     (169.3)   
                                          ------      ------     -------
                                           544.2        57.7       601.9
                                          ------      ------     -------
Gross deferred income tax liability            318.9        81.2       400.1    
                                          ------      ------     -------

Deferred income tax liability at                                                
statutory tax rates                         111.6        30.8       142.4 
                                          ======      ======     =======

Note 26 - Other long-term liabilities                                           

At December 31                                              1996        1995    
                                                          $m          $m

Pensions (note 33(i))                                       28.4        20.6    
Post-retirement benefits other than pensions (note 33(iv))  48.2        47.8    
Long-term restructuring, disposition and other provisions   74.6        41.3    
Other long-term liabilities                                 30.9        25.5    
                                                       -----       -----
                                                       182.1       135.2
                                                       =====       =====

Note 27 - Minority interests                                                    

At December 31, 1995 minority interests represent the 24.0 per cent interest    
in the outstanding voting share capital of Alert held by the minority           
shareholders of Alert and not owned by the Company.  The value is based on the  
consolidated net assets of Alert on a historical cost basis.                    

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In February 1996, following approval by Alert's shareholders, Alert was merged  
into the Company and, as a result, those shares then held by the minority       
shareholders and not owned by the Company were converted into the right to      
receive in cash the price paid per share by the Company in the initial tender   
offer.  Accordingly, the minority interest outstanding at December 31, 1995     
has been eliminated.                                                            

Note 28 - Convertible redeemable preference shares                              

At December 31                                  1996        1995        1994    
                                              $m          $m          $m

Authorized:                                                                     
225,000 5 3/4% convertible cumulative redeemable                                
preference shares 2002 of $1 each (1995 - 225,000;                        
1994 - 225,000) (i)                           0.2         0.2         0.2 
500,000 6% convertible cumulative redeemable                                    
preference shares 2002 of $1 each (1995 - 500,000;                        
1994 - 500,000) (ii)                          0.5         0.5         0.5 
125,000,000 convertible cumulative redeemable                                   
preference shares of $1 each (1995 - 125,000,000;                         
1994 - 125,000,000) (iii)                   125.0       125.0       125.0 
                                           -----       -----       -----
                                           125.7       125.7       125.7
                                           =====       =====       =====

The movement in convertible redeemable preference shares since January 1, 1994  
has been as follows:                                                            

                               5 3/4% shares             6% shares

                              Number          $m      Number          $m

Issued and outstanding:                                                         
At January 1, 1994                29,738        35.5     283,030       391.7    
Reacquired in the market at                                                     
purchase cost                      (25)          -           -           -  
Redeemed                         (28,957)      (34.6)   (278,625)     (385.6)   
Reversal of redemption premium                                                  
on shares not redeemed              -        (0.1)          -        (1.7)
                             -------     -------     -------     -------
At December 31, 1994                 756         0.8       4,405         4.4    
Converted into common                                                           
shares (note 30)                     -           -        (225)       (0.3) 
                             -------     -------     -------     -------
At December 31, 1995                 756         0.8       4,180         4.1    
Redeemed                            (756)       (0.8)     (4,180)       (4.1)   
                             -------     -------     -------     -------

At December 31, 1996                   -           -           -           -    
                             =======     =======     =======     =======

In January 1994 ADT redeemed 28,957 of its 5 3/4% convertible redeemable        
preference shares for an aggregate consideration, including redemption          
premium, of $34.6 million.  The Company funded the redemption from cash on      
hand.                                                                           

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In October 1994 ADT redeemed 278,625 of its 6% convertible redeemable           
preference shares for an aggregate consideration, including redemption          
premium, of $385.6 million.  The Company funded the redemption through the      
drawdown of $231.6 million under its previous bank credit agreement and $154.0  
million from cash on hand.                                                      

In November 1996 ADT redeemed 756 of its 5 3/4% convertible redeemable          
preference shares and 4,180 of its 6% convertible redeemable preference shares  
for an aggregate consideration of $4.9 million.  The Company funded the         
redemption from cash on hand.                                                   

Dividends on convertible redeemable preference shares amounted to:              

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

5 3/4% convertible redeemable preference shares    -           -           -    
6% convertible redeemable preference shares      0.3         0.3        13.3    
                                           -----       -----       -----
                                             0.3         0.3        13.3
                                           =====       =====       =====

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(i)     5 3/4% convertible cumulative redeemable preference shares 2002 (par    
value $1 each)                                                                  

In April 1987 175,000 of these mandatorily redeemable preference shares were    
issued for cash at a price of $1,000 each, and during the period to December    
31, 1996 139,262 of these preference shares were converted into ADT common      
shares.  The holders of these preference shares were entitled to a fixed        
cumulative preferential dividend at the rate of 5 3/4 per cent per annum.       
These preference shares were subject to redemption, at the option of the        
holders, in January 1994 at 119.625 per cent of their issue amount.  ADT had    
the right to require redemption or conversion of the preference shares in       
certain circumstances.  This right was exercised in November 1996 and all       
remaining preference shares were redeemed at their carrying amount.             

(ii)    6% convertible cumulative redeemable preference shares 2002 (par value  
$1 each)                                                        

In September 1987 400,000 of these mandatorily redeemable preference shares     
were issued for cash at a price of $1,000 each, and during the period to        
December 31, 1996 225 of these preference shares were converted into ADT        
common shares.  The holders of these preference shares were entitled to a       
fixed cumulative preferential dividend at the rate of 6 per cent per annum.     
These preference shares were subject to redemption, at the option of the        
holders, in October 1994 at 138.375 per cent of their issue amount.  ADT had    
the right to require redemption or conversion of the preference shares in       
certain circumstances.  This right was exercised in November 1996 and all       
remaining preference shares were redeemed at their carrying amount.             

(iii)   Convertible cumulative redeemable preference shares (par value $1 each) 

In November 1996 the board of directors of ADT determined that 2.5 million of   
the 125 million authorized convertible cumulative redeemable preference shares  
of $1 each be classified as Series A First Preference Shares Purchase Rights,   
pursuant to the Shareholders Rights Plan referred to below, which have been     
reserved for issuance upon exercise of the said Rights.                         

The rights attaching to the balance of 122.5 million convertible cumulative     
redeemable preference shares of $1 each, none of which are issued and           
outstanding, as to dividends, return of capital, redemption, conversion,        
voting and otherwise may be determined by ADT on or before the time of          
allotment.                                                                      

In November 1996 the board of directors of ADT adopted a Shareholder Rights     
Plan ("the Plan").  Under the Plan each ADT common shareholder received a       
distribution of one right for each ADT common share held.  Each right entitles  
the holder to purchase from ADT shares of a new series of first preference      
shares at an initial purchase price of $90 per one hundredth of a first         
preference share.  The rights will become exercisable and will detach from the  
common shares a specified period of time after any person becomes the           
beneficial owner of 15 per cent or more of ADT's common shares, or commences a  
tender or exchange offer which, if consummated, would result in any person      
becoming the beneficial owner of 15 per cent or more of ADT's common shares.    
The rights did not become exercisable on account of any person being the        
beneficial owner of 15 per cent or more of ADT's common shares when the Plan    
was adopted, but become exercisable if such a person increases their            
beneficial ownership after that time (note 32(iv)).                             

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If any person becomes the beneficial owner of 15 per cent or more of ADT's      
common shares, or if any person who was already the beneficial owner of 15 per  
cent or more of ADT's common shares when the Plan was adopted increases their   
beneficial ownership, each right will enable the holder, other than the         
acquiring person, to purchase, for the rights purchase price, ADT common        
shares having a market value of twice the rights purchase price.                

If, following an acquisition of 15 per cent or more of ADT's common shares,     
ADT is involved in any mergers or other business combinations or sells or       
transfers more than 50 per cent of its assets or earnings power, each right     
will entitle the holder to purchase, for the rights purchase price, common      
shares, of the other party to such transaction, having a market value of twice  
the rights purchase price.                                                      

ADT may redeem the rights at a price of $0.01 per right at any time prior to    
the specified period of time after a person has become the beneficial owner of  
15 per cent or more of ADT's common shares.  The rights will expire in          
November 2005 unless exercised or redeemed earlier.                             

In the event of liquidation of ADT, the holders of all of ADT's convertible     
redeemable preference shares are together entitled to payment to them of the    
amount for which the preference shares were subscribed and any unpaid           
dividends, prior to any payment to the common shareholders.                     

Note 29 - Non-voting exchangeable shares                                        

The movement in non-voting exchangeable shares since January 1, 1994 has been   
as follows:                                                                     

                                                      Number          $m

At January 1, 1994                                       925,537        15.0    
Exchanged into common shares held as                                            
treasury shares (note 31)                             (922,628)      (15.0) 
                                                    --------       -----
At December 31, 1994                                       2,909           -    
Exchanged into common shares held as                                            
treasury shares (note 31)                               (2,909)          -  
                                                    --------       -----

At December 31, 1995 and December 31, 1996                     -           -    
                                                    ========       =====

In March 1991 ADT Finance Inc., an indirect wholly owned Canadian subsidiary    
of ADT, issued 1,000,000 non-voting exchangeable shares exchangeable for        
common shares of ADT at the option of the holder, at any time, on a one for     
one basis.  Holders of non-voting exchangeable shares were entitled only to     
dividends equivalent to dividends declared and paid on common shares of ADT.    

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Note 30 - Common shares                                                         

At December 31                                  1996        1995        1994    
                                              $m          $m          $m

Authorized:                                                                     
220,000,000 shares of $0.10 each                                                
(1995 - 220,000,000; 1994 - 220,000,000)     22.0        22.0        22.0 
                                          ======      ======      ======
Issued and outstanding:                                                         
141,382,697 shares of $0.10 each                                                
(1995 - 138,885,405; 1994 - 138,097,754)     14.1        13.9        13.8 
                                          ======      ======      ======

The movement in common shares since January 1, 1994 has been as follows:        

                                            1996        1995        1994
                                          Number      Number      Number

At January 1 (i)                         138,885,405 138,097,754 137,364,915    
Exercise of executive share options (ii)   2,479,820     780,366      35,000    
Exchange of Liquid Yield Option                                                 
Notes (note 23(iii))                       17,472           -           - 
Conversion of convertible preference                                            
shares (note 28)                                -       7,285           - 
Exercise of warrants (iii)                         -           -     697,839    
                                     ----------- ----------- -----------
At December 31                           141,382,697 138,885,405 138,097,754    
                                     =========== =========== ===========

(i)     The number of common shares at January 1, 1994 has been restated for    
the pooling of interests with ASH (note 3).                                     

                                                                  Number

At January 1, 1994 - as previously reported                      130,329,975    
Pooling of interests with ASH (note 3)                             7,034,940    
                                                             -----------
At January 1, 1994 - as restated                                 137,364,915    
                                                             ===========

(ii)    ADT has granted employee share options which are issued under five      
fixed share option plans and schemes which reserve common shares for issuance   
to the Company's executives and managers.  The majority of options have been    
granted under the ADT 1993 Long-Term Incentive Plan ("the Incentive Plan").     
The Incentive Plan was originally approved by shareholders of ADT in October    
1993 and certain subsequent amendments to the Incentive Plan were approved by   
shareholders of ADT in April 1996.  The Incentive Plan is administered by the   
remuneration committee of the board of directors of ADT, which consists         
exclusively of independent non-executive directors of ADT.  Options are         
generally granted to purchase ADT common shares at prices which equate to or    
are above the market price of the common shares on the date the option is       
granted.  Conditions of vesting are determined at the time of grant.  Certain   
options have been granted in which participants were required to pay a          
subscription price as a condition of vesting.  Options which have been granted  
under the Incentive Plan to date have generally vested and become exercisable   
in installments over a three year period from the date of grant and have a      
maximum term of ten years.                                                      

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The movement in executive share options outstanding since January 1, 1994 has   
been as follows:                                                                

                                            1996        1995        1994
                                          Number      Number      Number

At January 1                              13,491,185  12,180,778  10,410,425    
Granted                                    6,448,333   3,000,000   1,975,000    
Exercised                                 (2,479,820)   (780,366)    (35,000)   
Cancelled on purchase (note 34)                    -    (657,832)          -    
Lapsed/surrendered                          (207,298)   (251,395)   (169,647)   
                                      ----------  ----------  ----------
At December 31                            17,252,400  13,491,185  12,180,778    
                                      ==========  ==========  ==========

The number of executive share options exercisable and available for future      
grant at December 31 was as follows:                                            

                                            1996        1995        1994
                                          Number      Number      Number

Exercisable                               12,787,060   5,423,423   3,454,935    
Available for future grant                 2,593,335     401,668   3,385,000    
                                      ----------   ---------   ---------

The weighted average executive share options exercise price information since   
January 1, 1994 has been as follows:                                            

                                            1996        1995        1994
                                               $           $           $

Outstanding at January 1                       11.52       11.08       11.32    
Granted                                        15.32       11.97        9.24    
Exercised                                       9.98        8.84        8.93    
Cancelled on purchase (note 34)                    -        9.10           -    
Lapsed/surrendered                             17.24       12.68       15.85    
Outstanding at December 31                     13.06       11.52       11.08    
Exercisable at December 31                     13.21       12.38       12.59    
                                           -----       -----       -----

The estimated weighted average fair value of executive share options granted    
during 1996 was $4.33 on the date of grant using the option-pricing model and   
assumptions referred to below.                                                  

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The following table summarizes information about outstanding and exercisable    
executive share options at December 31, 1996.                                   

                                                        [Enlarge/Download Table]

                         Options outstanding         Options exercisable                  

                                                                                          
                                                 Weighted                                 
  Range of                         Weighted       average                     Weighted    
  exercise                          average      remaining                     average    
   prices          Number       exercise price  contractual      Number     exercise price
     $          outstanding           $         life-years     exercisable         $      

 8.01 to 10.00   4,292,250           8.91           6.9         3,607,748        8.87     
10.01 to 13.00   2,997,250          11.68           5.6           503,080       11.52     
13.01 to 15.00   8,690,400          14.95           6.8         8,523,732       14.97     
15.01 to 20.00   1,163,000          16.48           9.1            43,000       15.94     
20.01 to 30.00     109,500          26.43           2.5           109,500       26.43     
                ----------         ------                      ----------       -----     
                17,252,400          13.06                      12,787,060       13.21     
                ==========         ======                      ==========       =====     

During 1996 the Company was required to adopt Statement of Financial            
Accounting Standards No. 123 "Accounting for Stock-Based Compensation" ("SFAS   
123").  SFAS 123 allows companies to measure compensation cost in connection    
with executive share option plans and schemes using a fair value based method,  
or to continue to use an intrinsic value based method which generally does not  
result in a compensation cost.  The Company has decided to continue to use the  
intrinsic value based method and no compensation cost has been recorded.  Had   
the fair value based method been adopted consistent with the provisions of      
SFAS 123, the Company's proforma net (loss) income and proforma net (loss)      
income per common share for the years ended December 31, 1996 and 1995 would    
have been as follows:                                                           

Year ended December 31                                      1996        1995    

Net (loss) income-proforma                              ($717.1m)     $17.8m    
                                                    --------      ------
Net (loss) income per common share-proforma               ($5.23)      $0.13    
                                                    ========      ======

The fair value of each option grant was estimated on the date of grant using    
the Black-Scholes option-pricing model with the following weighted average      
assumptions.                                                                    

Expected stock price volatility                 28 per cent                     
Risk free interest rate                         5.9 per cent                    
Expected dividend yield                         nil per cent                    
Expected life of options                        3.7 years                       

The effects of applying SFAS 123 in this proforma disclosure are not            
indicative of future amounts.  SFAS 123 does not apply to awards prior to 1995  
and additional awards in future years are anticipated.                          

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(iii)   In April 1992 an issue was made to common shareholders of warrants to   
subscribe for ADT common shares on the basis of one warrant for every six       
common shares then held.  Each warrant gave the holder the right to subscribe   
for one common share at $10.00 per common share during the period from July 1,  
1992 to June 30, 1994.  All warrants not exercised at June 30, 1994 have        
lapsed in accordance with the terms of the warrants.                            

The movement in warrants since January 1, 1994 has been as follows:             
                                                              Number

At January 1, 1994                                                18,254,318    
Exercised                                                           (697,839)   
Lapsed                                                           (17,556,479)   
                                                             -----------
At December 31, 1994, December 31, 1995 and                                     
December 31, 1996                                                       - 
                                                             ===========

(iv)    In July 1996, as part of the then agreement to combine with Republic,   
ADT granted to Republic a warrant to acquire 15 million common shares of ADT    
at an exercise price of $20 per common share.  Following termination of the     
agreement to combine with Republic, the warrant vested and was exercisable by   
Republic in the six month period commencing September 27, 1996 (note 32(iv)).   
In March 1997 the warrant was exercised by Republic and the Company received    
$300 million in cash.                                                           

(v)     In March 1997 the Company announced that it had entered into a          
definitive merger agreement, subject to shareholder approval and other          
customary matters, with Tyco International Ltd. ("Tyco"), a United States       
quoted company engaged in the manufacture of industrial and commercial          
products.  Tyco shareholders will receive one common share in the combined      
company for each Tyco common share and ADT shareholders, through a reverse      
stock split, will receive 0.48133 common shares in the combined company for     
each ADT common share.                                                          

Note 31 - Treasury shares                                                       

The movement in treasury common shares held by a subsidiary of ADT at purchase  
cost since January 1, 1994 has been as follows:                                 
                                                    Number          $m

At January 1, 1994                                     4,109,324       102.9    
Exchange of non-voting exchangeable shares (note 29)    (922,628)      (23.1)   
                                                   ---------       -----
At December 31, 1994                                   3,186,696        79.8    
Exchange of non-voting exchangeable shares (note 29)      (2,909)       (0.1)   
Treasury shares given as employee remuneration            (1,000)          -    
                                                   ---------       -----
At December 31, 1995 and December 31, 1996             3,182,787        79.7    
                                                   =========       =====

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Note 32 - Commitments and contingencies                                         

(i)     The Company leases land, buildings, motor vehicles and other equipment  
under various contracts.  The future total minimum rental payments required     
under operating leases that have remaining noncancelable lease terms in excess  
of one year at December 31, 1996 are as follows:                                
                                                                      $m

Year ending December 31                         1997                    67.3    
                                            1998                    54.4
                                            1999                    39.0
                                            2000                    28.3
                                            2001                    18.9
                                      Thereafter                    41.6
                                                                   -----
                                                                   249.5
                                                                   =====

The net operating lease rental charge for the year included in the              
consolidated statements of income amounted to $77.2 million (1995 - $75.3       
million; 1994 - $68.6 million).                                                 

(ii)    Financial instruments which potentially subject the Company to          
concentrations of credit risk principally consist of cash and cash equivalents  
and trade receivables.  The Company places its cash and cash equivalents with   
high credit quality financial institutions throughout the world and, by         
policy, limits the amount of credit exposure to any one financial institution.  
The Company's trade receivables primarily result from its electronic security   
services and vehicle auction services businesses and reflects a broad           
international customer base.  Credit limits, ongoing credit evaluation and      
account monitoring procedures are utilized to minimize the risk of loss.  As a  
consequence, concentrations of credit risk are limited.  In addition, the       
Vendor Note (note 19) also subjects the Company to credit risk in the event of  
non-performance by ITS.  However, the Company currently expects that ITS will   
meet its liabilities to the Company under the terms of the Vendor Note.         

(iii)   At December 31, 1996 the Company had issued guarantor surety bonds of   
$10.0 million (1995 - $10.0 million) to back insurance policies.  These surety  
bonds have unlimited duration.                                                  

(iv)    In December 1996 Westar Capital, Inc. ("WCI"), a wholly owned           
subsidiary of Western Resources, Inc. and a 24 per cent shareholder of ADT,     
filed a complaint (as subsequently amended) in the US Courts against ADT and    
its directors, among others.  The complaint alleges, among other things, that   
ADT and its directors breached their fiduciary duties to WCI and ADT's other    
shareholders (a) by adopting the Plan (note 28(iii)), and (b) by issuing to     
Republic the warrant (note 30(iv)).  The complaint seeks a court order (a)      
directing ADT to redeem the Plan, and (b) declaring the warrant issued to       
Republic null and void or preventing ADT and Republic from exercising their     
rights under the warrant or preventing Republic from selling or transferring    
any of the warrant shares it currently owns.  The complaint also seeks          
unspecified damages, attorneys' fees and costs.  Accordingly, an estimate       
of any potential loss or range of possible losses, if any, cannot be made.      
ADT and its board of directors believe that the allegations in WCI's            
complaint against ADT and its directors are without merit and intend to         
vigorously defend against them.                                                 

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In December 1996 Mr. C. Gachot filed a complaint in the US Courts against ADT   
and certain of its directors, among others.  The complaint was brought on       
behalf of a class of all shareholders of ADT and alleges, among other things,   
that the Plan (note 28(iii)) and the warrant issued to Republic (note 30(iv))   
are improper.  The complaint seeks unspecified monetary relief.  Accordingly,   
an estimate of any potential loss or range of possible losses, if any, cannot   
be made.  ADT and its board of directors believe that the allegations in Mr.    
Gachot's complaint against ADT and certain of its directors are without merit   
and intend to vigorously defend against them.                                   

In March 1997 Crandon Capital Partners ("CCP") filed a complaint in the US      
Courts against ADT and certain of its current and former directors, among       
others.  The complaint was brought by CCP in a derivative capacity on behalf    
of ADT.  The complaint alleges, among other things, that ADT's directors        
breached their fiduciary duties and wasted corporate assets in connection with  
(a) the granting of options to certain officers of ADT in 1996, (b) the         
implementation of the Plan (note 28(iii)), and (c) the issuance to Republic of  
the warrant (note 30(iv)).  The complaint seeks a court order directing ADT's   
directors to establish a system of internal controls to prevent repetition of   
the alleged breaches of fiduciary duty and corporate waste, and an unspecified  
amount of damages.  Accordingly, an estimate of any potential loss or range of  
possible losses, if any, cannot be made.  ADT and its directors believe that    
the allegations in CCP's complaint against ADT and certain of its directors     
are without merit and intend to vigorously defend against them.                 

The Company is a defendant in a number of other pending legal proceedings       
incidental to present and former operations, acquisitions and dispositions.     
The Company does not expect the outcome of these proceedings either             
individually or in the aggregate to have a material adverse effect on the       
consolidated results of operations and cash flows or the consolidated           
financial position of the Company.                                              

Note 33 - Pension and other plans                                               

The Company operates various defined benefit pension plans designed in          
accordance with conditions and practices in the countries concerned.            
Contributions are based on periodic actuarial valuations which use the          
projected unit credit method of calculation and are charged to the              
consolidated statements of income on a systematic basis over the expected       
average remaining service lives of current employees.  The net pension expense  
is assessed in accordance with the advice of professionally qualified           
actuaries in the countries concerned or is based on subsequent formal reviews   
for this purpose.                                                               

The Company's United States electronic security services operation has a        
non-contributory, funded, defined benefit pension plan covering substantially   
all of its employees.                                                           

The Company has two contributory, funded, defined benefit pension plans in the  
United Kingdom covering substantially all salaried and non-salaried employees.  

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Details of the most recent independent actuarial valuations or formal reviews   
are set out below:                                                              

(i)     United States plan                                                      

The net pension expense for the United States plan included the following       
components:                                                                     

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Service cost-benefits earned during year         6.5         5.1         6.1    
Interest cost on projected benefit obligations  13.3        12.9        11.9    
Return on assets                               (17.1)      (16.3)      (16.1)   
Net amortization and deferral                    4.9        (0.8)        0.1    
                                           -----       -----       -----
Net pension expense                              7.6         0.9         2.0    
                                           =====       =====       =====

As a result of an early retirement plan implemented during 1996, a curtailment  
loss of $4.8 million is included in the net amortization and deferral           
component of net pension expense for the year ended December 31, 1996.          

The following table sets forth the actuarial present value of accumulated       
benefit obligations and funded status for the Company's United States plan:     

At December 31                                              1996        1995    
                                                          $m          $m
Accumulated benefit obligations, including vested                               
benefits of $155.4 million (1995 - $157.8 million)      169.5       164.4 
                                                      ======      ======
Total projected benefit obligations                        193.5       189.4    
                                                      ------      ------
Plan assets at fair value, primarily stocks,                                    
bonds and money market funds                            192.6       183.5 
Less: Unrecognized net gain                                (28.1)      (15.4)   
Plus: Unrecognized prior service costs                       0.6         0.7    
                                                      ------      ------
                                                       165.1       168.8
                                                      ------      ------
Net pension liability (note 26)                             28.4        20.6    
                                                      ======      ======
Benefit cover                                                99%         97%    
                                                      ------      ------
The actuarial assumptions for the expected long-term rate of return on plan     
assets, weighted average discount rate, and rate of increase of future          
compensation levels used in determining the actuarial present value of          
accumulated benefit obligations for 1996 were 10.0 per cent, 7.5 per cent and   
4.0 per cent, respectively  (1995 - 10.0 per cent, 7.0 per cent and 4.0 per     
cent, respectively).  The actuarial valuations of the United States plan were   
carried out by Kwasha Lipton in 1996 and by Buck Consultants in 1995 and 1994.  

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(ii)    United Kingdom plans                                                    

The aggregate net pension (income) expense for the United Kingdom plans         
included the following components:                                              

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Service cost-benefits earned during year         3.6         3.9         5.0    
Interest cost on projected benefit obligations   7.1         8.8         7.0    
Return on assets                               (11.5)      (17.3)          -    
Net amortization and deferral                   (2.2)        6.8        (9.7)   
                                           -----       -----       -----
Net pension (income) expense                    (3.0)        2.2         2.3    
                                           =====       =====       =====

As a result of the disposal of an interest in European Auctions (notes 7(i)     
and 34) a curtailment gain of $2.7 million is included in the net amortization  
and deferral component of net pension income for the year ended December 31,    
1996.                                                                           

The following table sets forth the aggregate actuarial present value of         
accumulated benefit obligations and funded status for the Company's United      
Kingdom plans:                                                                  

At December 31                                              1996        1995    
                                                          $m          $m

Accumulated benefit obligations, including vested                               
benefits of $92.8 million (1995 - $82.4 million)         92.8        82.4 
                                                       =====       =====

Total projected benefit obligations                        101.4        91.6    
                                                       -----       -----
Plan assets at fair value, primarily stocks,                                    
bonds and money market funds                            133.3       116.7 
Less:Unamortized net assets                                (13.0)       (6.1)   
Less:  Unrecognized net gain                               (12.1)      (21.1)   
Plus:  Unrecognized prior service costs                        -         2.1    
                                                       -----       -----
                                                       108.2        91.6
                                                       -----       -----
Net pension asset                                            6.8           -    
                                                       =====       =====
Benefit cover                                               131%        127%    
                                                       -----       -----

The actuarial assumptions for the expected long-term rate of return on plan     
assets, weighted average discount rate, and rate of increase of future          
compensation levels used in determining the actuarial present value of          
accumulated benefit obligations for 1996 were 9.5 per cent, 8.5 per cent and    
7.0 per cent, respectively (1995 - 9.0 per cent, 8.3 per cent and 6.5 per       
cent, respectively).  The actuarial valuations of the United Kingdom plans      
were principally carried out by William M. Mercer and by Friends Provident.     
The net pension asset at December 31, 1996 is included in other long-term       
assets (note 20).                                                               

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(iii)   The aggregate net pension expense for the year in respect of the        
United States and United Kingdom plans amounted to $4.6 million (1995 - $3.1    
million; 1994 - $4.3 million).                                                  

(iv)    The Company's United States electronic security services operation      
sponsors an unfunded defined benefit post-retirement plan which covers both     
salaried and non-salaried employees and which provides medical and other        
benefits.  This post-retirement health care plan is contributory, with retiree  
contributions adjusted annually.                                                

The net post-retirement benefit expense included the following components:      

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Service cost                                     0.7         0.5         0.6    
Interest cost                                    2.5         2.4         2.3    
Net amortization and deferral                   (1.2)       (1.3)       (1.3)   
                                            ----        ----        ----
Net post-retirement benefit expense              2.0         1.6         1.6    
                                            ====        ====        ====

The following table sets forth the components of the plan's accumulated         
post-retirement benefit obligations and benefit liability:                      

At December 31                                              1996        1995    
                                                          $m          $m

Retirees                                                    27.6        22.8    
Fully eligible active plan participants                      5.0         7.7    
Other active plan participants                               6.4         4.8    
                                                        ----        ----
Accumulated post-retirement benefit obligations             39.0        35.3    
Less:  Unrecognized net loss                                (5.3)       (3.3)   
Plus:  Unrecognized prior service credit                    14.5        15.8    
                                                        ----        ----
Post-retirement benefit liability (note 26)                 48.2        47.8    
                                                        ====        ====

During 1992 the Company adopted amendments to the plan that reduced benefits    
attributable to prior service.  These amendments resulted in approximately a    
$20 million decrease in the obligation for benefits attributable to prior       
service.  This decrease is being amortized as a reduction of plan costs on an   
actuarially calculated basis over a period of approximately twenty years        
beginning January 1992.  Effective January 1995 the Company implemented a       
defined dollar benefit cap for all current and future retirees, regardless of   
age.                                                                            

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The weighted average discount rate used in determining the accumulated          
post-retirement benefit obligations was 7.5 per cent (1995 - 7.0 per cent).     
The actuarial valuations of the plan were carried out by Kwasha Lipton in 1996  
and by Buck Consultants in 1995 and 1994.                                       

Note 34 - Related party transactions                                            

In December 1995 the Company entered into an agreement with Integrated          
Transport Systems Limited ("ITS"), a United Kingdom unquoted company, and its   
wholly owned subsidiaries Loanoption Limited and ITS Finance Limited, under     
which the Company disposed of an interest in European Auctions.                 

The aggregate consideration received by the Company on closing was comprised    
of cash of $235.1 million, $187.6 million Vendor Note (note 18) with an issue   
price of $83.9 million and valued by the Company at $74.6 million, $31.1        
million Shareholder Loan Notes (note 18) with an issue price of $13.9 million   
and valued by the Company at $13.3 million, and a 43.1 per cent interest in     
the ordinary share capital of ITS at an issue price of $2.0 million and valued  
by the Company at $0.9 million.                                                 

In February 1996 the Company disposed of its entire interest in Shareholder     
Loan Notes and 33.1 per cent of the ordinary share capital of ITS for an        
aggregate cash consideration of $15.4 million (note 18).  As a result, the      
Company now holds a 10.0 per cent interest in the ordinary share capital of     
ITS, valued and accounted for by the Company at a nominal amount, together      
with the Vendor Note which has been accounted for at its amortized cost.        

Mr. D.B. Hammond and Mr. T.J. Gibson are both directors of ITS.  Mr. Hammond    
was, until April 1996, Deputy Chairman of ADT and Mr. Gibson was the Chief      
Executive Officer of ADT Auction Group Limited.                                 

Mr. Hammond and Mr. Gibson subscribed $10.4 million and $0.8 million, in        
total, respectively, to  the capital of ITS and, as a result, were interested   
in Shareholder Loan Notes with issue prices of $9.4 million and $0.7 million,   
respectively, and 22.3 per cent and 1.7 per cent, respectively, of the          
ordinary share capital of ITS.  Other senior management and employees of        
European Auctions subscribed $3.7 million to the capital of ITS and, as a       
group, were interested in Shareholder Loan Notes with an issue price of $3.3    
million and 8.0 per cent of the ordinary share capital of ITS.  In addition,    
at closing, Mr. M.A. Ashcroft, Chairman and Chief Executive Officer of ADT,     
subscribed $7.0 million to the capital of ITS and, as a result, was interested  
in Shareholder Loan Notes with an issue price of $6.3 million and 15.0 per      
cent of the ordinary share capital of ITS, which interest he continues to       
hold.  Mr. Ashcroft is not an officer or director of ITS or any of its          
subsidiaries and has no involvement in the day to day management of ITS or any  
of its subsidiaries.                                                            

Upon the disposal by the Company of an interest in European Auctions, ADT       
share options held by directors and employees of European Auctions became       
immediately exercisable.  ADT entered into arrangements with Mr. Gibson under   
which share options held by him at the time of the disposal by the Company of   
an interest in European Auctions were purchased by ADT for an aggregate         
economic value totalling $1.2 million, based on ADT's common share price on     
December 19, 1995, of which Mr. Gibson invested $0.8 million in the capital of  
ITS, referred to above.  ADT also entered into similar arrangements with other  
senior management and employees of European Auctions under which ADT purchased  
share options held by them for an aggregate economic value totalling $0.6       
million, in order to enable them to invest in the capital of ITS.  In           
addition, in order to further enable Mr. Hammond to invest in the capital of    
ITS, ADT purchased from him share options with an aggregate economic value      
totalling $1.1 million, based on ADT's common share price on December 19,       
1995, which would otherwise have been exercisable in March 1996.                

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Upon the disposal by the Company of an interest in European Auctions, Mr.       
Gibson received a severance payment of $0.3 million and other senior            
management and employees of European Auctions, as a group, received severance   
payments totalling $0.4 million.                                                

A company controlled by Mr. Ashcroft made non-collateralized loans to Mr.       
Hammond, or companies controlled by him, of an aggregate of $7.8 million,       
solely for the purpose of enabling Mr. Hammond or these companies to invest in  
the capital of ITS.                                                             

The cash consideration paid to the Company on closing was obtained by the ITS   
group through the subscription of $26.5 million in the capital of ITS and       
approximately $209.7 million through the drawdown of sterling term loans under  
a bank credit agreement entered into between the ITS group and a group of       
banks.  The bank credit agreement has a term of seven years and obligations     
thereunder are guaranteed and collateralized by a first priority pledge of the  
shares and assets of all the companies comprising European Auctions and the     
ITS group.                                                                      

At closing, the Company entered into an agreement with the ITS group whereby    
the Company granted to ITS and its subsidiaries permission to use the ADT name  
and certain trademarks for a period of up to three years for a total cash       
consideration, paid at closing, of $0.6 million.                                

At closing, the Company entered into an option agreement with Mr. Ashcroft      
which, if exercised, would have required Mr. Ashcroft to purchase from the      
Company, for cash fifty days after closing, Shareholder Loan Notes with an      
issue price of up to $8.2 million and up to 19.6 per cent of the ordinary       
share capital of ITS.  In addition, at closing, ITS entered into an agreement   
with the Company and Mr. Ashcroft under which ITS agreed to use its reasonable  
efforts, for a forty-five day period after closing, to find unrelated third     
party investors to purchase Shareholder Loan Notes and ordinary share capital   
of ITS from the Company and Mr. Ashcroft, and under which the Company and Mr.   
Ashcroft agreed to certain voting restrictions in respect of their holdings of  
the  ordinary share capital of ITS as described below.  In February 1996 the    
Company and Mr. Ashcroft agreed that the mutual obligations under the option    
agreement be released.                                                          

At December 31, 1995 the Company's investment in the ordinary share capital of  
ITS was accounted for as an unconsolidated subsidiary under temporary control,  
due to an agreement between ITS, the Company and Mr. Ashcroft limiting the      
voting rights of each of the Company and Mr. Ashcroft to 15.0 per cent of the   
voting rights of ITS and due to the fact that Mr. Hammond did not be seek       
re-election to the board of directors of ADT at the 1996 annual general         
meeting.  Accordingly, at December 31, 1995 the equity method of accounting     
was used in the consolidated financial statements, and the Vendor Note and      
Shareholder Loan Notes were accounted for at their amortized cost.              

An opinion regarding the fair value of the transactions described above was     
provided to the independent non-executive directors of ADT by a leading         
European investment banking firm and the transactions were approved             
unanimously by the independent non-executive directors of ADT.                  

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Note 35 - Quarterly financial data (unaudited)                                  

                                                                [Download Table]
                                   1996      1996      1996      1996     1996  
                                  First    Second     Third    Fourth           
                                Quarter   Quarter   Quarter   Quarter     Year  
                                     $m        $m        $m        $m       $m  
                                                                                
Net sales:                                                                      
Electronic security services      336.7     347.1     355.0     367.4   1,406.2 
Vehicle auction services           74.6      75.3      72.9      75.0     297.8 
                                 ------    ------    ------    ------   ------- 
Net sales                         411.3     422.4     427.9     442.4   1,704.0 
                                 ======    ======    ======    ======   ======= 
Operating (loss) income:                                                        
Electronic security services (i) (679.2)     54.1      52.5    (183.9)   (756.5)
Vehicle auction services (ii)      (2.2)     12.9       9.7       6.7      27.1 
Corporate (iii)                    (5.4)     (7.2)    (15.1)     (8.4)    (36.1)
                                 ------    ------    ------    ------   ------- 

Operating (loss) income          (686.8)     59.8      47.1    (185.6)   (765.5)
Interest income                     6.5       6.3       5.4       9.3      27.5 
Interest expense                  (27.4)    (26.7)    (24.5)    (22.4)   (101.0)
Gain on disposal of businesses        -         -       1.7         -       1.7 
Other income less expenses (iv)    (0.3)      1.0       0.7     127.4     128.8 
                                 ------    ------    ------    ------   ------- 
(Loss) income before                                                            
  income taxes                   (708.0)     40.4      30.4     (71.3)   (708.5)
Income taxes                        2.4      (9.7)     (7.2)     36.3      21.8 
                                 ------    ------    ------    ------   ------- 

(Loss) income before                                                            
   extraordinary items           (705.6)     30.7      23.2     (35.0)   (686.7)
Extraordinary items (v)               -      (1.2)     (4.6)     (2.6)     (8.4)
                                 ------    ------    ------    ------   ------- 

Net (loss) income                (705.6)     29.5      18.6     (37.6)   (695.1)
                                 ======    ======    ======    ======   ======= 
Dividends on preference                                                         
   shares                          (0.1)     (0.1)        -      (0.1)     (0.3)
                                 ------    ------    ------    ------   ------- 

Net (loss) income available                                                     
   to common shareholders        (705.7)     29.4      18.6     (37.7)   (695.4)
                                 ======    ======    ======    ======   ======= 

Primary (loss) earnings                                                         
   per common share (vi)              $         $         $         $         $ 
(Loss) income before                                                            
   extraordinary items            (5.20)     0.22      0.16     (0.25)    (5.01)
Extraordinary items                   -     (0.01)    (0.03)    (0.02)    (0.06)
                                 ------    ------    ------    ------   ------- 
Net (loss) income per                                                           
   common share                   (5.20)     0.21      0.13     (0.27)    (5.07)
                                 ======    ======    ======    ======   ======= 

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Notes:                                                                          

(i)     In the first quarter of 1996 electronic security services operating     
income was stated after a charge for the impairment of long-lived assets of     
$731.7 million (note 6(i)).  In the fourth quarter of 1996 electronic security  
services operating income was stated after a charge of $232.5 million relating  
to restructuring and other non-recurring items (note 5(i)).                     

(ii)    In the first quarter of 1996 vehicle auction services operating income  
was stated after a charge for the impairment of long-lived assets of $13.0      
million (note 6(ii)).                                                           

(iii)   In the second and third quarters of 1996 corporate expenses included    
$0.4 million and $10.9 million, respectively, related to professional and       
other transaction costs arising in connection with the merger of ADT and ASH    
and the terminated merger with Republic (note 4(iii)).  In the fourth quarter   
of 1996 corporate expenses were stated after a charge of $4.8 million relating  
to restructuring and other non-recurring items (note 5(ii)).                    

(iv)    Other income less expenses principally comprised a net gain arising     
from the disposal of the Company's entire investment in Limelight Group plc, a  
net settlement gain with BDO, and gains and losses on currency transactions     
(note 8).                                                                       

(v)     Extraordinary items principally were comprised of losses on repayment   
and the write off of net unamortized deferred refinancing costs relating to     
the early extinguishment of debt (note 11).                                     

(vi)    Primary (loss) earnings per common share equalled fully diluted (loss)  
earnings per common share in all periods except for the second quarter of       
1996.  In the second quarter of 1996 fully diluted earnings per common share    
from income before extraordinary items, extraordinary items and net income      
were $0.21, $0.01 (loss) and $0.20, respectively.                               

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Note 35 - Quarterly financial data (unaudited) (continued)                      

                                                                [Download Table]

                                   1995      1995      1995      1995      1995 
                                  First    Second     Third    Fourth           
                                Quarter   Quarter   Quarter   Quarter      Year 
                                     $m        $m        $m        $m        $m 
                                                                                
Net sales:                                                                      
Electronic security services    321.1     337.7     337.5     354.6     1,350.9 
Vehicle auction services        112.3     110.7     106.5     103.4       432.9 
                               ------    ------    ------    ------    -------- 

Net sales                       433.4     448.4     444.0     458.0     1,783.8 
                               ======    ======    ======    ======    ======== 

Operating income:                                                               
Electronic security services (i) 42.6      46.4      50.0      33.4       172.4 
Vehicle auction services         22.7      20.3      17.2      10.0        70.2 
Corporate (ii)                   (7.5)     (7.3)     (6.7)    (20.3)      (41.8)
                               ------    ------    ------    ------    -------- 

Operating income                 57.8      59.4      60.5      23.1       200.8 
Interest income                   3.7       3.9       4.7       3.9        16.2 
Interest expense                (28.3)    (30.5)    (30.4)    (27.1)     (116.3)
Loss on disposal                                                                
   of businesses (iii)              -      (4.9)     (0.5)    (31.2)      (36.6)
Other income less expenses (iv)   1.1      (6.9)      0.9      (0.1)       (5.0)
                               ------    ------    ------    ------    -------- 

Income (loss) before                                                            
   income taxes                  34.3      21.0      35.2     (31.4)       59.1 
Income taxes                     (9.7)    (10.7)     (9.2)      1.5       (28.1)
                               ------    ------    ------    ------    -------- 

Income (loss) before                                                            
   extraordinary items           24.6      10.3      26.0     (29.9)       31.0 
Extraordinary items (v)             -         -      (8.0)     (1.8)       (9.8)
                               ------    ------    ------    ------    -------- 

Net income (loss)                24.6      10.3      18.0     (31.7)       21.2 
Dividends on preference                                                         
   shares                        (0.1)     (0.1)     (0.1)        -        (0.3)
                               ------    ------    ------    ------    -------- 

Net income (loss) available                                                     
   to common shareholders        24.5      10.2      17.9     (31.7)       20.9 
                               ======    ======    ======    ======    ======== 

Primary earnings (loss)                                                         
   per common share (vi)            $         $         $         $          $  
Income (loss) before                                                            
   extraordinary items           0.18      0.07      0.19     (0.22)      0.22  
Extraordinary items                 -         -     (0.06)    (0.01)     (0.07) 
                               ------    ------    ------    ------    -------  

Net income (loss) per                                                           
   common share                  0.18      0.07      0.13     (0.23)      0.15  
                               ======    ======    ======    ======    =======  

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Notes:                                                                          

(i)     In the fourth quarter of 1995 electronic security services operating    
income was stated after a charge of $21.4 million relating to restructuring     
and other non-recurring items (note 5(i)).                                      

(ii)    In the fourth quarter of 1995 corporate expenses were stated after a    
charge of $12.8 million relating to restructuring and other non-recurring       
items (note 5(ii)).                                                             

(iii)   In the fourth quarter of 1995 loss on disposal of businesses            
principally comprised a net loss of $65.8 million arising on the disposal by    
the Company of an interest in European Auctions and a net gain of $31.4 million 
arising on the disposal of its entire European electronic article surveillance  
business (notes 7(i) and 7(ii)).                                                

(iv)    Other income less expenses principally comprised net losses arising     
from the disposal of the Company's entire equity investments in CGPS and        
Microtech which were held by the ASH group (note 8(i)).                         

(v)     Extraordinary items principally were comprised of the write off of net  
unamortized deferred refinancing costs relating to the early extinguishment of  
debt (note 11).                                                                 

(vi)    Primary earnings (loss) per common share equalled fully diluted         
earnings (loss) per common share in all periods except for the third quarter    
of 1995.  In the third quarter of 1995 fully diluted earnings per common share  
from income before extraordinary items, extraordinary items and net income      
were $0.18, $0.05 (loss) and $0.13, respectively.                               

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Note 36 - ADT Operations, Inc.                                                  

ADT Operations, Inc., a company incorporated in the State of Delaware, United   
States, is an indirect wholly owned subsidiary of ADT.  ADT Operations, Inc.    
is a holding company that, through its subsidiaries, conducts a substantial     
proportion of the Company's electronic security services businesses in the      
United States and all of the Company's vehicle auction services businesses in   
the United States.  ADT Operations, Inc. has no independent business            
operations or assets other than its investment in its subsidiaries,             
intercompany balances and holdings of cash and cash equivalents.                

The consolidated financial statements presented below incorporate the           
financial statements of ADT Operations, Inc.  and its subsidiaries ("ADT        
Operations").  The basis upon which the consolidated financial statements of    
ADT Operations has been prepared and the summary of significant accounting      
policies applied are as described in notes 1 and 2.  The consolidated           
financial statements of ADT Operations have been prepared assuming that ADT     
Operations will continue as a going concern.  This assumption is based on the   
subordinated and non-collateralized debt position of ADT Operations, its        
financing structure within the ADT group of companies and ADT Operations'       
financial plans and projections.  In the consolidated financial statements of   
ADT Operations, "affiliates" refers to certain direct and indirect wholly       
owned subsidiaries of ADT which are not within the ADT Operations group of      
companies.                                                                      

Consolidated statements of income                                               

Year ended December 31                            1996        1995        1994  
                                   Notes          $m          $m          $m

Net sales                              (i)     1,212.0     1,094.3       986.3  
Cost of sales                                   (605.2)     (537.5)     (491.0) 
Selling, general and                                                            
  administrative expenses                      (421.9)     (369.3)     (331.4)
Restructuring and other non-recurring                                           
 charges                             (ii)     (132.1)      (19.4)          -
Charge for the impairment of                                                    
 long-lived assets                  (iii)     (316.4)          -           -
                                              ------     -------      ------
Operating (loss) income                 (i)     (263.6)      168.1       163.9  
Interest income - affiliates                       1.3           -        29.7  
Interest income - non-affiliates                   2.4         3.1         2.6  
Interest expense - affiliates                    (32.4)      (22.5)      (49.1) 
Interest expense - non-affiliates                (75.1)      (79.9)      (66.4) 
Gain on disposal of businesses                                                  
 to affiliates                       (iv)        2.0           -           -
Loss on disposal of businesses to                                               
  non-affiliates                       (v)          -           -        (0.4)
Other income less expenses             (vi)        8.5        (6.7)       (0.3) 
                                              ------     -------      ------

(Loss) income before income taxes               (356.9)       62.1        80.0  
Income taxes                          (vii)        1.4       (19.0)      (25.5) 
                                              ------     -------      ------

(Loss) income before extraordinary items        (355.5)       43.1        54.5  
Extraordinary items (net of                                                     
 income taxes)                     (viii)       (1.3)       (8.9)          -
                                              ------     -------      ------

Net (loss) income                               (356.8)       34.2        54.5  
                                              ======     =======      ======

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Consolidated balance sheets                                                     

At December 31                                              1996        1995    
                                       Notes              $m          $m

Assets                                                                          
Current assets:                                                                 
Cash and cash equivalents                                   82.9        54.0    
Accounts receivable - net - affiliates                      44.4        28.9    
Accounts receivable - net - non-affiliates  (ix)           149.4       132.8    
Inventories                                  (x)            21.6        17.2    
Prepaid expenses and other current assets   (xi)            22.9         6.9    
                                                    --------    --------
Total current assets                                       321.2       239.8    

Property, plant and equipment - net        (xii)         1,131.3     1,049.1    
Goodwill and other intangibles - net      (xiii)           351.1       698.4    
Long-term notes receivable - affiliates    (xiv)            51.3           -    
Other long-term assets                      (xv)            31.2        28.9    
                                                    --------    --------
Total assets                                             1,886.1     2,016.2    
                                                    ========    ========

Liabilities and shareholder's equity                                            
Current liabilities:                                                            
Short-term debt - non-affiliates           (xvi)           129.8        36.3    
Accounts payable - affiliates                               14.5         9.6    
Accounts payable - non-affiliates                           91.8        75.2    
Other current liabilities - non-affiliates(xvii)           143.5       127.5    
                                                    --------    --------
Total current liabilities                                  379.6       248.6    

Long-term debt - affiliates              (xviii)           690.1       130.2    
Long-term debt - non-affiliates            (xix)           877.2       895.4    
Deferred revenue (note 24)                                  72.4        67.3    
Deferred income taxes                       (xx)            78.9        92.9    
Other long-term liabilities - affiliates   (xxi)           117.4       129.8    
Other long-term liabilities                                                     
- non-affiliates                       (xxii)           119.4        96.3 
Minority interests (note 27)                                   -        15.6    
                                                    --------    --------
Total liabilities                                        2,335.0     1,676.1    
                                                    --------    --------

Commitments and contingencies             (xxiv)                                

Shareholder's equity:                                                           
Common shares                            (xxiii)               -           -    
Contributed surplus                                        858.5       858.5    
Accumulated deficit                                     (1,307.4)     (518.4)   
                                                    --------    --------
Total shareholder's equity                                (448.9)      340.1    
                                                    --------    --------
Total liabilities and shareholder's equity               1,886.1     2,016.2    
                                                    ========    ========

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Consolidated statements of cash flows                                           

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Cash flows from operating activities                                            
Net (loss) income                             (356.8)       34.2        54.5    
Adjustments to reconcile net (loss)                                             
income to net cash provided by                                            
operating activities:                                                     
Charge for the impairment of long-lived assets 316.4           -          -     
Depreciation                                   144.0       120.2       104.6    
Goodwill and other intangibles amortization     11.7        18.2        18.5    
Restructuring and other non-recurring charges  122.0        18.4           -    
Interest on long-term notes                                                     
receivable - affiliates                      (1.3)          -           - 
Liquid Yield Option Notes discount amortization 20.3         9.4           -    
Refinancing costs amortization                   3.2         4.9         5.3    
Deferred income taxes                           (4.3)       16.5        22.0    
Extraordinary items                              1.3         8.9           -    
Gain on disposal of property,                                                   
plant and equipment                          (2.2)       (1.2)       (0.8)
Gain on disposal of businesses to affiliates    (2.0)          -           -    
Loss on disposal of businesses to non-affiliates   -           -         0.4    
Gain on customer contract transactions                                          
- affiliates                                (18.1)          -           - 
Gain arising from the ownership of investments     -           -        (3.2)   
Other                                            3.2         2.3           -    

Changes in assets and liabilities:                                              
Accounts receivable - affiliates                (7.5)      (14.6)       (0.4)   
Accounts receivable - non-affiliates           (10.5)      (29.3)       (3.9)   
Inventories                                     (3.5)        3.6        (4.3)   
Other assets                                   (11.0)       (0.4)        1.1    
Accounts payable - affiliates                   (7.5)       (5.2)       (7.4)   
Accounts payable - non-affiliates               14.7        16.6         7.7    
Deferred revenue                                 3.1         2.7         0.9    
Other liabilities                               (5.6)       (8.8)        3.5    
                                           -----       -----       -----
Net cash provided by operating activities      209.6       196.4       198.5    
                                           -----       -----       -----
Cash flows from investing activities                                            
Purchase of property, plant and equipment     (293.2)     (221.4)     (175.8)   
Disposal of property, plant and equipment        6.9         3.9         5.4    
Long-term notes receivable - affiliates        (50.0)          -       318.8    
Acquisition of businesses from non-affiliates  (25.5)      (64.0)          -    
Purchase of customer contracts                  (4.1)          -           -    
Disposal of businesses to non-affiliates           -           -        10.2    
Disposal of assets to affiliates                73.2           -           -    
Disposal of other investments to non-affiliates    -           -        19.7    
Disposal of trademarks to affiliates               -           -       150.0    
Other                                           (1.7)       (1.6)       (5.2)   
                                           -----       -----       -----
Net cash (utilized) provided by                                                 
investing activities                       (294.4)     (283.1)      323.1 
                                           -----       -----       -----

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Cash flows from financing activities                                            
Net receipt (repayments) of                                                     
short-term debt - affiliates                    -           -      (145.3)
Net repayments of short-term                                                    
debt - non-affiliates                        11.4       (19.6)      (25.9)
Repayments of long-term debt - affiliates          -           -      (430.4)   
Proceeds from long-term debt - affiliates       34.3        33.0       199.9    
Repayments of long-term debt - non-affiliates  (15.0)     (209.6)       (0.2)   
Repayment of long-term acquisition debt            -       (39.6)          -    
Proceeds from long-term debt - non-affiliates   83.0       312.4       231.6    
Debt refinancing costs                             -       (12.0)       (1.0)   
Dividends paid                                     -           -      (352.5)   
Other                                              -        (2.2)       (3.7)   
                                           -----       -----       -----
Net cash provided (utilized) by                                                 
financing activities                         113.7        62.4      (527.5) 
                                           -----       -----       -----
Net increase (decrease) in cash and                                             
cash equivalents                              28.9       (24.3)       (5.9) 
Cash and cash equivalents at beginning of year  54.0        78.3        84.2    
                                           -----       -----       -----
Cash and cash equivalents at end of year        82.9        54.0        78.3    
                                           =====       =====       =====

Cash payments during the year for                                               
Interest - affiliates                           31.3        21.7        49.3    
Interest - non-affiliates                       52.0        66.5        57.7    
Income taxes                                     2.6         2.3         4.0    

In conjunction with the acquisition of businesses from                          
affiliates, net assets were assumed as follows                            
Goodwill and other intangibles                   5.4           -           -    
Notes issued                                   (70.0)          -           -    
                                           -----       -----       -----
Net assets assumed                             (64.6)          -           -    
                                           =====       =====       =====

In conjunction with the acquisition of businesses from                          
non-affiliates, net (assets) liabilities were assumed as follows          
Goodwill and other intangibles                  10.3       121.0           -    
Cash paid (net of cash assumed)                (25.5)      (64.0)          -    
                                           -----       -----       -----
Net (assets) liabilities assumed               (15.2)       57.0           -    
                                           =====       =====       =====

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Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

In conjunction with the disposal of businesses to                               
affiliates, net assets were disposed as follows                           
Short-term receivable                            8.0           -           -    
Gain on disposal of businesses (including net                                   
unamortized goodwill and other intangibles)  (2.0)          -           - 
                                           -----       -----       -----
Net assets disposed                              6.0           -           -    
                                           =====       =====       =====

In conjunction with the disposal of businesses to                               
non-affiliates, net assets were disposed as follows                       
Cash received (net of cash disposed)               -           -        10.2    
Loss on disposal of businesses (including net                                   
unamortized goodwill and other intangibles)     -           -         0.4 
                                           -----       -----       -----

Net assets disposed                                -           -        10.6    
                                           =====       =====       =====

Consolidated statements of changes in shareholder's equity                      

                  Common Contributed Accumulated
                              shares     surplus     deficit       Total
                                  $m          $m          $m          $m

At January 1, 1994                     -       858.5      (254.6)      603.9    
Net income                             -           -        54.5        54.5    
Cash dividends                         -           -      (352.5)     (352.5)   
                              ------      ------     -------      ------

At December 31, 1994                   -       858.5      (552.6)      305.9    
Net income                             -           -        34.2        34.2    
                              ------      ------     -------      ------

At December 31, 1995                   -       858.5      (518.4)      340.1    
Net loss                               -           -      (356.8)     (356.8)   
Dividends (a)                          -           -      (432.2)     (432.2)   
                              ------      ------     -------      ------

At December 31, 1996                   -       858.5    (1,307.4)     (448.9)   
                              ======      ======     =======      ======

(a)     A dividend of $432.2 million was paid by ADT Operations, Inc. in        
December 1996 and the consideration was the assignment to ADT Operations        
Inc.'s immediate parent of a loan note owed to ADT Operations, Inc. by a        
subsidiary (note (xviii)).                                                      

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Note (i) - Segment information                                                  

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net sales                                                                       
Electronic security services (a)               914.2       824.5       733.0    
Vehicle auction services                       297.8       269.8       253.3    
                                         -------     -------     -------
                                         1,212.0     1,094.3       986.3
                                         =======     =======     =======
Operating (loss) income                                                         
Electronic security services (a)              (289.9)      135.2       135.6    
Vehicle auction services (b)                    27.1        34.3        33.7    
Corporate (c)                                   (0.8)       (1.4)       (5.4)   
                                         -------     -------     -------
                                          (263.6)      168.1       163.9
                                         =======     =======     =======

(a)     In 1996 electronic security services operating income was stated after  
a charge of $131.6 million (1995 - $19.4 million) relating to restructuring     
and other non-recurring items (note (ii)) and after a charge for the            
impairment of long-lived assets of $303.4 million (note (iii)).                 

In December 1996 ADT Operations disposed of certain of its electronic security  
services operations (Sonitrol franchises) to an affiliate.  The net gain on     
disposal of $2.0 million was included in the gain on disposal of businesses to  
affiliates (note (iv)).                                                         

During 1994 ADT Operations disposed of certain of its electronic security       
services operations (Puerto Rico and US Virgin Islands).  The net loss on       
disposal of $0.4 million was included in the loss on disposal of businesses to  
non-affiliates (note (v)).                                                      

The following information represents the amounts included in the electronic     
security services business segment information above which related to the       
operations disposed of.                                                         

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net sales                                        6.1         6.1        12.7    
Operating income                                 0.2         0.4         2.5    

(b)     In 1996 vehicle auction services operating income was stated after a    
charge for the impairment of long-lived assets of $13.0 million (note (iii)).   

(c)     Corporate expenses comprise administrative, legal and general           
corporate expenses net of other income.  In 1996 corporate expenses were        
stated after a charge of $0.5 million relating to restructuring and other       
non-recurring items (note (ii)).                                                

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(d)     The costs incurred in producing and communicating advertising are       
generally expensed when incurred.  The total amount of advertising expense for  
the year included in the consolidated statements of income amounted to $58.3    
million (1995 - $49.7 million; 1994 - $38.1 million).                           

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Depreciation and amortization                                                   
Electronic security services                   140.5       123.6       108.8    
Vehicle auction services                        15.0        14.7        14.2    
Corporate                                        0.2         0.1         0.1    
                                          ------      ------      ------
                                           155.7       138.4       123.1
                                          ======      ======      ======

Capital expenditures                                                            
Electronic security services                   264.7       201.1       161.8    
Vehicle auction services                        25.7        18.9        14.0    
Corporate                                        2.8         1.4           -    
                                          ------      ------      ------
                                           293.2       221.4       175.8
                                          ======      ======      ======

Identifiable assets                                                             
Electronic security services                 1,289.0     1,513.4     1,284.6    
Vehicle auction services                       467.7       440.3       425.3    
Corporate                                      129.4        62.5        90.3    
                                         -------     -------     -------
                                         1,886.1     2,016.2     1,800.2
                                         =======     =======     =======

Note (ii) - Restructuring and other non-recurring charges                       

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Electronic security services                  (131.6)      (19.4)          -    
Corporate                                       (0.5)          -           -    
                                          ------      ------      ------
                                          (132.1)      (19.4)          -
                                          ======      ======      ======

As a consequence of the Re-Engineering Project, and incorporating the effects   
of the acquisition of Alert, in each of the fourth quarters of 1996 and 1995    
senior executive management approved a restructuring plan which resulted in a   
charge for restructuring and other non-recurring items of $131.6 million and    
$19.4 million, respectively (note 5(i)).  The effects of the Re-Engineering     
Project resulted in a charge for restructuring and other non-recurring items    
at the corporate level in 1996 of $0.5 million (note 5(ii)).                    

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Note (iii) -  Charge for the impairment of long-lived assets                    

Effective January 1, 1996, ADT Operations was required to adopt SFAS 121.       
Following the adoption of SFAS 121, in the first quarter of 1996 ADT            
Operations recorded an aggregate non-cash charge for the impairment of          
long-lived assets of $316.4 million, as a separate line item in the             
consolidated statements of income, with no consequential tax effect (note 6).   
The $303.4 million impairment charge in the electronic security services        
division comprised $302.4 million relating to goodwill and other intangibles    
and $1.0 million relating to other assets.  The $13.0 million impairment        
charge in the vehicle auction services division related to goodwill and other   
intangibles.                                                                    

Note (iv) - Gain on disposal of businesses to affiliates                        

In December 1996 ADT Operations disposed of certain of its electronic security  
services operations (Sonitrol franchises) to an affiliate.  The aggregate       
consideration on disposal amounted to $8.0 million, which was financed through  
a short-term receivable from an affiliate, and the net gain on disposal of      
$2.0 million included $1.8 million relating to the write off of net             
unamortized goodwill and other intangibles (note (xiii)).                       

Note (v) - Loss on disposal of businesses to non-affiliate                      

During 1994 ADT Operations disposed of certain of its electronic security       
services operations (Puerto Rico and US Virgin Islands).  The aggregate cash    
consideration on disposal amounted to $10.6 million and the net loss on         
disposal of $0.4 million included $4.8 million relating to the write off of     
net unamortized goodwill and other intangibles.                                 

Note (vi) - Other income less expenses                                          

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Net gain arising on customer                                                    
contract transactions - affiliates            18.1           -           -  
Management fees - net - affiliates              (9.6)       (6.7)       (3.5)   
Gains and losses arising from the ownership of                                  
long-term investments                           -           -         3.2 
                                            ----        ----        ----
                                              8.5        (6.7)       (0.3)
                                            ====        ====        ====

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Note (vii) - Income taxes                                                       

(a)     The provision for income taxes in the consolidated statements of        
income was as follows:                                          

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Current income taxes:                                                           
US (principally state income taxes)             (2.9)       (2.5)       (3.5)   
Deferred income taxes: (note (xx))                                              
US (principally federal income taxes)            4.3       (16.5)      (22.0)   
                                            ----       -----       -----
                                              1.4       (19.0)      (25.5)
                                            ====       =====       =====

(b)     The reconciliation between notional US federal income taxes at the      
statutory rate on consolidated (loss) income before income taxes and ADT        
Operations' income tax provision was as follows:                                

Year ended December 31                          1996        1995        1994    
                                              $m          $m          $m

Notional US federal income taxes                                                
at the statutory rate                        124.9       (21.7)      (28.0) 
Adjustments to reconcile to ADT Operations'                                     
income tax provision:                                                     
US state income tax provisions, net             (2.9)       (2.5)       (3.2)   
SFAS 121 impairment                           (110.7)          -           -    
Utilization and/or recognition of tax loss                                      
carryforwards and other items                (9.9)        5.2         5.7 
                                          ------      ------      ------
Income tax provision                             1.4       (19.0)      (25.5)   
                                          ======      ======      ======

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Note (viii) - Extraordinary items                                               

During 1996 and 1995 affiliates of ADT Operations reacquired in the market      
certain of ADT Operations, Inc.'s senior subordinated notes (note (xix)(a)),    
which was financed from cash on hand.  Extraordinary items included the write   
off of net unamortized deferred refinancing costs of $0.5 million (1995 - $0.8  
million), and were stated net of applicable income taxes of $0.2 million (1995  
- $0.2 million).                                                                

In December 1996 ADT Operations, Inc. entered into a new bank credit            
agreement, subject to completion of certain additional documentation which was  
signed in January 1997, which replaced in full its previous bank credit         
agreement and which was subsequently cancelled (note (xix)(c)). Extraordinary   
items included the write off of net unamortized deferred refinancing costs of   
$1.5 million relating to the early extinguishment of all amounts outstanding    
under the revolving bank credit agreement, and were stated net of applicable    
income taxes of $0.5 million.                                                   

In July 1995 ADT Operations, Inc. repaid in full all amounts owed under its     
previous bank credit agreement, which was subsequently cancelled.  ADT          
Operations, Inc. funded the repayment from the net proceeds of the issue of its 
Liquid Yield Option Notes (note (xix)(b)).  Extraordinary items included the    
write off of net unamortized deferred refinancing costs of $12.8 million        
relating to the early extinguishment of all amounts outstanding under the       
previous bank credit agreement, and were stated net of applicable income taxes  
of $4.5 million.                                                                

Note (ix) - Accounts receivable - net - non-affiliates                          

At December 31                                              1996        1995    
                                                          $m          $m

Trade accounts receivable                                  160.2       144.7    
Less: allowance for doubtful receivables                   (10.8)      (11.9)   
                                                       -----       -----
                                                       149.4       132.8
                                                       =====       =====
Note (x) - Inventories                                                          

At December 31                                              1996        1995    
                                                          $m          $m

Raw materials and consumables                                6.0         6.5    
Work in process                                             11.4         7.4    
Finished goods                                               4.2         3.3    
                                                       -----       -----
                                                        21.6        17.2
                                                       =====       =====

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Note (xi) - Prepaid expenses and other current assets                           

At December 31                                              1996        1995    
                                                          $m          $m

Prepaid expenses                                             4.5         4.1    
Other current assets                                        18.4         2.8    
                                                       -----       -----
                                                        22.9         6.9
                                                       =====       =====

Note (xii) - Property , plant and equipment - net                               

At December 31                                              1996        1995    
                                                          $m          $m

Cost:                                                                           
Property and related improvements                          278.5       254.0    
Subscriber systems                                       1,336.9     1,098.1    
Other plant and equipment                                  156.7       136.1    
                                                     -------     -------
Total cost                                               1,772.1     1,488.2    
                                                     -------     -------
Accumulated depreciation:                                                       
Property and related improvements                           50.3        35.9    
Subscriber systems                                         480.6       330.8    
Other plant and equipment                                  109.9        72.4    
                                                     -------     -------
Total accumulated depreciation                             640.8       439.1    
                                                     -------     -------
Net book values                                          1,131.3     1,049.1    
                                                     =======     =======

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Note (xiii) - Goodwill and other intangibles - net                              

                                                        1996        1995
                                                          $m          $m

Cost:                                                                           
At January 1                                               841.2       720.2    
SFAS 121 impairment (note (iii))                          (429.1)          -    
Acquisitions (a)                                            19.8       121.0    
Disposals (b)                                              (41.1)          -    
                                                     -------     -------

At December 31                                             390.8       841.2    
                                                     -------     -------
Accumulated amortization:                                                       
At January 1                                               142.8       124.6    
SFAS 121 impairment (note (iii))                          (113.7)          -    
Charge for the year                                         11.7        18.2    
Disposals (b)                                               (1.1)          -    
                                                     -------     -------

At December 31                                              39.7       142.8    
                                                     -------     -------

Net book values:                                                                
At December 31                                             351.1       698.4    
                                                     =======     =======

(a)     In February 1996 ADT Operations acquired the remaining 24.0 per cent    
of the outstanding voting share capital of Alert, an electronic security        
services company, not already owned by ADT Operations, for an aggregate cash    
consideration of $25.5 million, which was financed from cash on hand.  The      
amount of goodwill arising from this acquisition was $10.3 million.  During     
1996 ADT Operations purchased other intangibles, principally customer           
contracts, for an aggregate cash consideration of $4.1 million which was        
financed from cash on hand.  In December 1996 ADT Operations acquired the       
electronic security services business and net assets of an affiliate for an     
aggregate consideration of $70.0 million which was financed through a           
long-term loan from an affiliate.  The amount of goodwill arising from this     
acquisition was $5.4 million.                                                   

In December 1995 ADT Operations acquired 76.0 per cent of the outstanding       
voting share capital of Alert, for an aggregate cash consideration of $69.0     
million, which was financed from $54.0 million of cash on hand and through a    
long-term loan from affiliates of $15.0 million.  The amount of goodwill and    
other intangibles arising from this acquisition was $80.1 million and $40.0     
million, respectively.  During 1995 ADT Operations also acquired several small  
electronic security services businesses for an aggregate cash consideration of  
$0.9 million.                                                                   

These acquisitions have been accounted for using the purchase method.           
Accordingly, the respective purchase prices have been allocated to assets       
acquired and liabilities assumed based on their preliminary estimated fair      
values.  These allocations resulted in goodwill and other intangibles of $19.8  
million arising during the year (1995 - $121.0 million).                        

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(b)     During 1996, ADT Operations disposed of certain of its customer         
contracts to an affiliate.  The aggregate cash consideration on disposal        
amounted to $74.5 million and the net gain on disposal of $36.3 million was     
included in other income less expenses (note (vi)).  In December 1996 ADT       
Operations disposed of certain of its electronic security services operations   
(Sonitrol franchises) to an affiliate.  The net unamortized goodwill and other  
intangibles on disposal of $1.8 million was included in the gain on disposal    
of businesses to affiliates (note (iv)).                                        

(c)     The accumulated cost, accumulated amortization and net book values of   
the goodwill balance included within goodwill and other intangibles at          
December 31, 1996 amounted to $385.7 million, $39.1 million and $346.6          
million, respectively (1995 - $801.2 million, $142.8 million and $658.4         
million, respectively).                                                         

Note (xiv)  - Long-term notes receivable - affiliates                           

In September 1996 ADT Operations subscribed for $73.8 million aggregate         
principal amount at maturity of subordinated deep discount zero coupon loan     
notes issued by an affiliate maturing in September 2001.  There are no          
periodic payments of interest.  The notes were issued at a price of $50.0       
million, reflecting a yield to maturity of 7.9 per cent per annum.  ADT         
Operations funded the subscription through loans drawn down under the revolving 
bank credit agreement.  The interest yield for 1996 amounted to $1.3 million.   

Note (xv) - Other long-term assets                                              

At December 31                                              1996        1995    
                                                          $m          $m

Deferred refinancing costs                                  19.5        24.7    
Other long-term assets                                      11.7         4.2    
                                                        ----        ----
                                                        31.2        28.9
                                                        ====        ====

In connection with the refinancing of certain long-term debt obligations of     
ADT Operations certain fees and expenses were incurred.  These refinancing      
costs are being amortized as interest expense through the consolidated          
statements of income on a straight line basis over the terms of the respective  
lives of ADT Operations various long-term debt obligations.  The refinancing    
costs amortization for the year amounted to $3.2 million (1995 - $4.9 million;  
1994 - $5.3 million).  During the year $2.0 million (1995 - $13.6 million;      
1994 - nil) of net unamortized deferred refinancing costs, relating to the      
early extinguishment of certain amounts outstanding under ADT Operations        
long-term debt obligations, were written off as extraordinary items in the      
consolidated statements of income (note (viii)).                                

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Note (xvi) - Short-term debt - non-affiliates                                   

At December 31                                              1996        1995    
                                                          $m          $m

Bank and acceptance facilities                              46.8        36.1    
Current portion of long-term debt (note (xix))              83.0         0.2    
                                                       -----        ----
                                                       129.8        36.3
                                                       =====        ====

The average rate of interest on short-term debt - non-affiliates outstanding    
at December 31, 1996 was 6.8 per cent (1995 - 7.9 per cent).  Short-term debt   
- non-affiliates is generally repayable on demand or at an interest payment     
date, and is non-collateralized except for $0.2 million of the current portion  
of long-term debt in 1995.                                                      

Note (xvii) - Other current liabilities - non-affiliates                        

At December 31                                              1996        1995    
                                                          $m          $m

Accruals                                                    23.3        24.1    
Payroll and employee benefits                               40.9        41.7    
Payments received on account                                12.5         8.9    
Income taxes                                                 2.3         2.0    
Interest payable                                            20.9        21.3    
Short-term restructuring, disposition and other provisions  37.9        25.3    
Other current liabilities                                    5.7         4.2    
                                                       -----        ----
                                                       143.5       127.5
                                                       =====       =====

Note (xviii) - Long-term debt - affiliates                                      

At December 31                                              1996        1995    
                                                          $m          $m

Interest bearing, non-collateralized,                                           
subordinated loan notes                                 634.2        97.4 
Senior subordinated notes held by                                               
affiliates (note (xix)(a))                               55.9        32.8 
                                                       -----       -----
                                                       690.1       130.2
                                                       =====       =====

The average rate of interest on the non-collateralized, subordinated notes at   
December 31, 1996 was 10.8 per cent (1995 - 10.8 per cent).  The average rate   
of interest on the non-collateralized, subordinated loan notes during the year  
was 10.6 per cent (1995 - 11.1 per cent; 1994 - 9.4 per cent).  The loan notes  
are repayable in December 1999 ($132.0 million), in December 2001 ($70.0        
million) and in August 2003 ($432.2 million).                                   

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Note (xix) - Long-term debt - non-affiliates                                    

At December 31                                              1996        1995    
                                                          $m          $m

Senior notes (a)                                           250.0       250.0    
Senior subordinated notes (a)                              294.1       317.2    
Liquid Yield Option Notes (b)                              326.8       306.8    
Revolving bank credit agreement (c)                         83.0        15.0    
Other                                                        6.3         6.6    
                                                       -----       -----
                                                       960.2       895.6
Less:  current portion (note (xvi))                        (83.0)       (0.2)   
                                                       -----       -----
                                                       877.2       895.4
                                                       =====       =====

(a)     In August 1993 ADT Operations, Inc. issued, through a public offering,  
$250.0 million of its 8.25 per cent senior notes due August 2000 guaranteed on  
a senior basis by ADT and certain subsidiaries of ADT Operations, Inc. (note    
23(i)) and $350.0 million of its 9.25 per cent senior subordinated notes due    
August 2003 guaranteed on a senior subordinated basis by ADT (note 23(ii)).     
During 1996 affiliates of ADT Operations reacquired in the market $23.1         
million (1995 - $32.8 million) face value of the senior subordinated notes and  
these notes are all classified under long-term debt - affiliates (note          
(xviii)).                                                                       

(b)     In July 1995 ADT Operations, Inc. issued $776,250,000 aggregate         
principal amount at maturity of its zero coupon subordinated Liquid Yield       
Option Notes maturing July 2010 (note 23(iii)).  The net proceeds of the issue  
amounted to $287.4 million which was used to repay in full all amounts          
outstanding under ADT Operations, Inc.'s previous bank credit agreement, which  
was subsequently cancelled.  The Notes discount amortization for 1996 amounted  
to $20.3 million (1995 - $9.4 million).  During 1996 619 Notes with a carrying  
value of $0.3 million were exchanged, at the option of the holders, for 17,472  
ADT common shares (note 30).                                                    

(c)     In August 1995 ADT Operations, Inc. entered into a new $300 million     
revolving bank credit agreement which replaced in full its previous bank        
credit agreement.  The new agreement has a term of five years and is            
guaranteed on a senior basis by ADT and certain subsidiaries of ADT             
Operations, Inc. (note 23(iv)).  At December 31, 1996 $83.0 million (1995 -     
$15.0 million) was drawn down under the agreement, which has been classified in 
the current portion of long-term debt, plus letters of credit amounting to      
$81.1 million (1995 - $81.0 million) which have been issued and have terms of   
less than one year.  The average rate of interest at December 31, 1996 was 6.5  
per cent (1995 - 7.6 per cent).                                                 

In December 1996 ADT Operations, Inc. entered into a new $200 million           
revolving bank credit agreement, subject to completion of certain additional    
documentation which was signed in January 1997, which replaced in full its      
previous bank credit agreement (note 23(iv)).                                   

The average rate of interest on all long-term debt - non-affiliates during the  
year was 7.9 per cent (1995 - 8.2 per cent; 1994 - 8.7 per cent).               

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Based on estimated interest rates currently available to ADT Operations for     
long-term debt - non-affiliates with similar terms and average maturities, the  
fair value of all long-term debt - non-affiliates at December 31, 1996          
amounted to approximately $1,010 million (1995 - approximately $960 million).   

The maturities and installments with respect to long-term debt -                
non-affiliates outstanding at December 31, 1996 are as follows:                 

                                                                    $m

Year ending December 31                         1997                    83.0    
                                            1998                     0.9
                                            1999                     1.6
                                            2000                   251.7
                                            2001                     0.9
                                      Thereafter                   622.1
                                                                   -----
                                                                   960.2
                                                                   =====

Under the terms of the indenture governing the senior subordinated notes a      
payment blockage prevents ADT Operations, Inc. and its guarantor subsidiaries   
and ADT from making any payment of principal, interest or premium on the        
senior subordinated notes and from purchasing, redeeming or otherwise           
acquiring any senior subordinated notes during the continuance of any payment   
blockage period.  No payment blockage is currently in effect.                   

At December 31, 1996, ADT Operations, Inc. had $414.1 million of Senior         
Indebtedness comprised of $83.0 million of Senior Indebtedness related to       
loans under the revolving bank credit agreement, $81.1 million of Senior        
Indebtedness related to letters of credit issued under the terms of the         
revolving bank credit agreement and $250.0 million of Senior Indebtedness       
related to the Senior Notes, (in each case as defined in the Senior             
Subordinated Note Indenture).                                                   

At December 31, 1996, ADT had no Guarantor Senior Indebtedness (as defined in   
the Senior Note Indenture, but excluding Indebtedness in respect of guarantees  
issued by ADT of debt of ADT Operations, Inc. or its subsidiaries).  At         
December 31, 1996, the subsidiary guarantors had $53.2 million of Guarantor     
Senior Indebtedness (as defined in the Senior Note Indenture), in each case     
ranking pari passu in right of payment with the Senior Note Guarantees.         

All of the subsidiary guarantors under the senior notes and the revolving bank  
credit agreement are direct or indirect, wholly owned subsidiaries of ADT       
Operations, Inc.  Separate financial statements and other disclosures for the   
subsidiary guarantors are not included herein because the subsidiary            
guarantors have guaranteed the senior notes on a joint and several basis, the   
aggregate assets, liabilities, earnings and equity of the subsidiary guarantors 
are substantially equivalent to the assets, liabilities, earnings and equity    
of ADT Operations, Inc. on a consolidated basis and such separate financial     
statements and other disclosures are not considered material to investors.      

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Note (xx) - Deferred income taxes                                               

The movement in deferred income taxes since January 1, 1994 has been as         
follows:                                                                        

                                            1996        1995        1994
                                              $m          $m          $m

At January 1                                    92.9        74.5        52.5    
(Credit) charge for the year (note (vii)(a))    (4.3)       16.5        22.0    
Extraordinary items (note (viii))               (0.7)       (4.7)          -    
Assumed on acquisitions - affiliates            (9.0)          -           -    
Reclassifications                                  -         6.6           -    
                                            ----        ----        ----
At December 31                                  78.9        92.9        74.5    
                                            ====        ====        ====

The significant temporary timing differences and tax loss carryforwards that    
gave rise to the deferred income tax balance were as follows:                   

At December 31                                              1996        1995    
                                                          $m          $m

Liabilities:                                                                    
Depreciation                                               861.0       733.9    
Other                                                        6.9         5.2    
                                                       -----       -----
                                                       867.9       739.1
                                                       -----       -----

Assets:                                                                         
Tax operating loss carryforwards                           406.7       331.3    
Provisions for estimated costs and expenses                121.0        59.4    
Interest expense                                           147.9        99.6    
Post-retirement benefit obligations                         78.6        66.5    
                                                       -----       -----
                                                       754.2       556.8
Valuation allowance                                       (111.8)      (83.2)   
                                                       -----       -----
                                                       642.4       473.6
                                                       -----       -----
Gross deferred income tax liability                        225.5       265.5    
                                                       -----       -----
Deferred income tax liability at statutory tax rate         78.9        92.9    
                                                       =====       =====

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The tax operating loss carryforwards at December 31, 1996 expire as follows:    

                                                                      $m

Year ending December 31                         1999                     6.8    
                                            2000                     4.1
                                            2001                    24.2
                                            2002                    18.3
                                            2003                     7.5
                                            2004                    80.2
                                            2005                   123.2
                                            2006                   107.2
                                            2007                    23.1
                                            2008                    12.1
                                                                   -----
                                                                   406.7
                                                                   =====

Note (xxi) - Other long-term liabilities - affiliates                           

At December 31                                              1996        1995    
                                                          $m          $m

Deferred gain                                              117.4       129.8    
                                                       =====       =====

During 1994 ADT Operations assigned its interest in its trademarks, service     
marks and associated goodwill to an affiliate for an aggregate consideration    
of $150.0 million.  In view of the fact that the assignment was to an           
affiliate, and taking into account the terms of the transaction, the net gain   
of $141.7 million arising on the assignment was deferred.  During 1996 $12.4    
million (1995 - $11.9 million) of this deferred gain was credited to the        
consolidated statements of income to offset license fee payments made by ADT    
Operations to the affiliate, calculated as a fixed percentage of net sales,     
for use of the trademarks and service marks referred to above.                  

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Note (xxii) - Other long-term liabilities - non-affiliates                      

At December 31                                              1996        1995    
                                                          $m          $m

Pensions (note 33(i))                                       28.4        20.6    
Post-retirement benefits other than pensions (note 33(iv))  48.2        47.8    
Long-term restructuring, disposition and other provisions   27.8        15.0    
Other long-term liabilities                                 15.0        12.9    
                                                       -----        ----
                                                       119.4        96.3
                                                       =====        ====

Note (xxiii) - Common shares                                                    

At December 31                                  1996        1995        1994    
                                          Number      Number      Number

Authorized:                                                                     
Common shares of $0.10 each                   10,000      10,000      10,000    
                                          ======      ======      ======
Issued and outstanding:                                                         
Common shares of $0.10 each                    1,820       1,820       1,820    
                                          ======      ======      ======

There has been no movement in authorized, issued and outstanding common shares  
since January 1, 1994.                                                          

Note (xxiv) - Commitments and contingencies                                     

(a)     ADT Operations leases land, buildings, motor vehicles and other         
equipment under various contracts.  The future total minimum rental payments    
required under operating leases that have remaining noncancelable lease terms   
in excess of one year at December 31, 1996 are as follows:                      

                                                                      $m

Year ending December 31                         1997                    37.5    
                                            1998                    35.2
                                            1999                    28.3
                                            2000                    20.3
                                            2001                    12.7
                                      Thereafter                    12.2
                                                                   -----
                                                                   146.2
                                                                   =====

The net operating lease rental charge for the year included in the              
consolidated statements of income amounted to $43.4 million (1995 - $44.1       
million; 1994 - $37.8 million).                                                 

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(b)     Financial instruments which potentially subject ADT Operations to       
concentrations of credit risk principally consist of cash and cash equivalents  
and trade receivables.  ADT Operations places its cash and cash equivalents     
with high credit quality financial institutions and, by policy, limits the      
amount of credit exposure to any one financial institution.  ADT Operations'    
trade receivables primarily result from its electronic security services and    
vehicle auction services businesses and reflects a broad customer base.         
Credit limits, ongoing credit evaluation and account monitoring procedures are  
utilized to minimize the risk of loss.  As a consequence, concentrations of     
credit risk are limited.                                                        

(c)     ADT Operations is a defendant in a number of pending legal proceedings  
incidental to present and former operations, acquisitions and dispositions.     
ADT Operations does not expect the outcome of these proceedings either          
individually or in the aggregate to have a material adverse effect on the       
consolidated results of operations and cash flows or the consolidated           
financial position of ADT Operations.                                           

Note (xxv) - Pension and other plans                                            

(a)     ADT Operations' United States electronic security services operation    
has a non-contributory, funded, defined benefit pension plan covering           
substantially all of its employees.  Details of this pension plan are provided  
in note 33(i).                                                                  

(b)     ADT Operations' United States electronic security services operation    
sponsors an unfunded defined benefit post-retirement plan which covers both     
salaried and non-salaried employees and which provides medical and other        
benefits.  Details of this post-retirement plan are provided in note 33(iv).    

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ADT LIMITED   

Consolidated Financial Statement Schedules  

Schedule II - Valuation and Qualifying Accounts 

<CPATION>                                                                       
                                                        [Enlarge/Download Table]
                             Balance at  Subsidiaries    Additions  Deductions-   Balance   
                             beginning     acquired     charged to   primarily     at end   
                             of period   (disposed of)     income    write-offs  of period  
                                    $m           $m            $m          $m          $m   
                                                                                            

Allowance for doubtful receivables:                                                         

Year ended December 31, 1994    22.1          (0.6)          4.0        (8.6)       16.9    
                              ======        ======        ======      ======      ======    

Year ended December 31, 1995    16.9          (1.1)          6.6        (5.4)       17.0    
                              ======        ======        ======      ======      ======    

Year ended December 31, 1996    17.0             -          10.6        (9.1)       18.5    
                              ======        ======        ======      ======      ======    


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ADT OPERATIONS, INC.    

Consolidated Financial Statement Schedules  

Schedule II - Valuation and Qualifying Accounts   

[CAPTION]                                                                       

                                                        [Enlarge/Download Table]
                             Balance at  Subsidiaries    Additions  Deductions-   Balance 
                             beginning     acquired     charged to   primarily     at end 
                             of period   (disposed of)     income    write-offs  of period
                                    $m           $m            $m          $m          $m 
                                                                                          

Allowance for doubtful receivables:                                                       

Year ended December 31, 1994     8.4            -            1.9        (2.3)       8.0   
                              ======        ======        ======      ======      =====   

Year ended December 31, 1995     8.0          1.5            4.4        (2.0)      11.9   
                              ======        ======        ======      ======      =====   

Year ended December 31, 1996    11.9            -            4.8        (5.9)      10.8   
                              ======        ======        ======      ======      =====   

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EXHIBIT INDEX     

2.1  Agreement and Plan of Merger by and among ADT Limited, Limited Apache,   
Inc. and Tyco International Ltd. dated as of March 17, 1997.(6)     

3.1  Memorandum of Association (as altered) and Bye-Laws of ADT Limited       
(incorporating all amendments to May 26, 1992).(1)                  

3.2  Certified copy of a resolution approved at the Annual General Meeting of 
  common shareholders of ADT Limited held on October 12, 1993, approving
  an increase in the authorized common share capital of ADT Limited from
$19.5 million to $22.0 million.(4)                                  

4.1  Indenture relating to the senior notes dated August 4, 1993 among ADT    
  Operations, as issuer, and ADT Limited and certain subsidiaries of ADT
Operations, as guarantors, and The Chase Manhattan Bank (National   
Association), as trustee, and the form of senior note included      
therein.(2)                                                         

4.2  Indenture relating to the senior subordinated notes dated August 4, 1993 
among ADT Operations, as issuer, and ADT Limited, as guarantor, and 
  NationsBank of Georgia, National Association, as trustee, and the form
of senior subordinated note included therein.(2)                    

4.3  Indenture dated as of July 1, 1995 among ADT Operations, Inc., ADT       
  Limited and Bank of Montreal Trust Company, as trustee and the form of
note included therein. (5)                                          

4.4  Rights Agreement between ADT Limited and Citibank, N.A. dated as of      
November 6, 1996.(9)                                                

4.5  First Amendment between ADT Limited and Citibank, N.A. dated as of March 
    3, 1997 to Rights Agreement between ADT Limited and Citibank, N.A. dated
as of November 6, 1996.(9)                                          

10.1  Rules of the ADT UK Executive Share Option Scheme (1984), amended to      
   reflect the reverse split of Common Shares effective June 17, 1991.(1)*

10.2  Rules of the ADT International Executive Share Option Plan, amended to    
   reflect the reverse split of Common Shares effective June 17, 1991.(1)*

10.3  Rules of the ADT UK and International Executive Share Option Schemes      
(1984) New Section, amended to reflect the reverse split of Common  
Shares effective June 17, 1991.(1)*                                 

10.4  Rules of the ADT Senior Executive Share Option Plan, amended to reflect   
the reverse split of Common Shares effective June 17, 1991.(1)*     

10.5  US (1990) Stock Option Plan of ADT Limited, amended to reflect the        
reverse split of Common Shares effective June 17, 1991.(1)*         

10.6  Employment Agreement dated May 8, 1993 between ADT Limited and Michael    
Anthony Ashcroft.(2)*                                               

10.7  Amendment to Employment Agreement dated December 18, 1996 between ADT     
Limited and Michael Anthony Ashcroft.(9)*                           

10.8  Employment agreement between ADT Limited and Stephen J. Ruzika dated as   
of February 26, 1997.(9)*                                           

10.9  Employment agreement between ADT, Inc. and Ron G. Lakey dated as of       
January 16, 1997.(9)*                                               

10.10 Agreement between ADT Automotive Holdings, Inc. and Michael J.            
Richardson dated as of January 29, 1997.(9)*                        

10.11 Incentive Compensation Agreement between ADT, Inc. and Michael J.         
Richardson dated as of February 10, 1997.(9)*                       

10.12 Severance Agreement between ADT Security Services, Inc. and Raymond       
Gross dated as of February 26, 1997.(9)*                            

10.13 Consulting Agreement between ADT, Inc. and John E. Danneberg dated as of  
August 28, 1996.(9)*                                                

10.14 Form of Indemnification Agreement.(9)*                                    

10.15 The ADT 1993 Long-Term Incentive Plan (as amended February 29,            
1996).(3)*                                                          

10.16 Purchase Agreement dated June 29, 1995 among ADT Operations, Inc., ADT    
   Limited and Merrill Lynch & Co., Inc. and the related pricing agreement
(5)                                                                 

10.17 US$200,000,000 Credit Agreement dated as of January 9, 1997, among ADT    
Operations, Inc., as the Borrower, and Certain Commercial Lending   
 Institutions as the Lenders, and the Bank of Nova Scotia as the Agent
for the Lenders.                                                    

10.18 Guaranty, dated as of January 9, 1997, made by ADT Limited in favor of    
each of the Lender Parties (as defined therein).                    

10.19 Subsidiary Guarantor Guaranty, dated as of January 9, 1997, made by each  
    Subsidiary Guarantor (as defined therein) in favor of each of the Lender
Parties (as defined therein).                                       

10.20 Pound Sterling 90,000,000 Facility Agreement dated March 17, 1997, among  
 ADT Finance Plc, as the Borrower, ADT (UK) Holdings PLC and Others as
    Guarantors, The Bank of Nova Scotia as Arranger and as Agent and Others.

10.21 ADT Limited Guarantee dated as of March 25, 1997, in respect of a         
 Pound Sterling 90,000,000 facility made available to ADT Finance Plc.

10.22 Pound Sterling 27,000,000 On Demand Facility Letter dated January 3,      
1997, between ADT Finance Plc and The Bank of Nova Scotia.          

10.23 ADT Limited Guarantee in respect of the obligations of ADT Finance Plc    
under a  Pound Sterling 27,000,000 Facility Letter dated January 3, 
1997.                                                               

10.24 Agreement dated December 29, 1995 among ADT (UK) Limited, ADT Holdings    
BV, Ruskin Limited, ADT Limited, Loanoption Limited and Integrated  
Transport Systems Limited for the sale and purchase of European     
Auctions.(7)                                                        

10.25 Agreement among ADT Limited, Thomas J. Gibson and Integrated Transport    
Systems Limited dated December 29, 1995.(8)*                        

10.26 Agreement among ADT Limited, David B. Hammond and Integrated Transport    
Systems Limited dated December 29, 1995.(8)*                        

10.27 Common Share Purchase Warrant issued by ADT Limited on July 1, 1996 to    
Republic Industries, Inc.(10)                                       

11.1  Statement regarding the computation of earnings per common share.         

21.1  List of subsidiaries of ADT Limited                                       

23.1  Consent of independent accountants to the incorporation by reference of   
this Annual Report into Form S-3 and Forms S-8.                     

27    Financial Data Schedule (for SEC use only).                               

--------------                                                                  
  (1)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1992.      

(2)   Previously filed as an Exhibit to the Registrant's Quarterly  
Report on Form 10-Q for the quarter ended June 30, 1993.

 (3)   Previously filed as an Exhibit to the Registrant's Registration
     Statement dated May 16, 1996, on Form S-8 filed May 17, 1996.

  (4)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1993.      

(5)   Previously filed as an Exhibit to the Registrant's Quarterly  
Report on Form 10-Q for the quarter ended June 30, 1995.

   (6)   Previously filed as an Exhibit to the Registrant's Current Report
dated March 24, 1997 on Form 8-K filed March 25, 1997.  

   (7)   Previously filed as an Exhibit to the Registrant's Current Report
   dated December 29, 1995 on Form 8-K filed January 16, 1996.

  (8)   Previously filed as an Exhibit to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1995.      

   (9)   Previously filed as an Exhibit to the Registrant's Schedule 14D-9
dated March 3, 1997.                                    

   (10)  Previously filed as an Exhibit to the Registrant's Current Report
dated July 10, 1996 on Form 8-K filed July 11, 1996.    

*     Management contract or compensatory plan.                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		5/6/06		45
		4/29/04		45
		3/31/00		48		50			10-Q,  10-Q/A
		2/9/00		50					SC 13G/A
		12/31/99		48					10-Q,  10-Q/A
		2/28/99		48
		9/27/98		52
		3/31/98		50					10-Q
		7/31/97		49
		7/8/97		20					DEFA14A
		4/30/97		49
		4/11/97		21					S-3/A
Filed on:		3/28/97							SC 13D,  SC 14D9/A
		3/26/97		52		59			DFAN14A,  SC 13D/A,  SC 14D1/A
		3/25/97		55		140			8-K,  DEFA14A,  SC 14D9/A
		3/24/97		1		140			DEFA14A
		3/21/97		39		52
		3/20/97		20					SC 14D9/A
		3/17/97		21		140			8-K,  DEFA14A,  SC 13D/A,  SC 14D1,  SC 14D9/A
		3/11/97		21					DFAN14A
		3/4/97		20					8-A12B/A,  DEFA14A,  PRER14A,  PRRN14A,  SC 14D9
		3/3/97		21		140			DFAN14A
		3/1/97		48
		2/27/97		20
		2/26/97		48		140
		2/24/97		21					DEFA14A
		2/14/97		52
		2/10/97		55		140			S-3,  SC 13G/A
		2/7/97		21
		1/29/97		49		140
		1/27/97		20					DFAN14A
		1/23/97		20
		1/21/97		20
		1/16/97		48		140
		1/9/97		55		140
		1/3/97		20		140
For Period End:		12/31/96		1		136			11-K
		12/27/96		20
		12/26/96		21					POS AM
		12/18/96		55		140			DFAN14A,  PREN14A,  SC 13D/A
		11/12/96		57					10-Q,  8-A12B,  8-A12B/A,  8-K/A
		11/6/96		54		140
		11/4/96		48
		10/21/96		57
		9/27/96		39		106			8-K
		9/19/96		57					8-K
		9/1/96		53
		8/28/96		53		140
		7/31/96		49
		7/11/96		56		140			3,  8-K,  SC 13D
		7/10/96		56		140
		7/1/96		55		140			11-K,  8-K
		6/30/96		73					10-Q
		6/1/96		94
		5/17/96		56		140			S-8
		5/16/96		56		140
		3/1/96		40
		2/29/96		55		140
		1/16/96		56		140
		1/1/96		33		125
		12/31/95		27		140			11-K
		12/29/95		55		140
		12/19/95		112
		7/1/95		54		140
		6/30/95		56		140
		6/29/95		55		140
		1/1/95		90
		12/31/94		27		122
		6/30/94		106
		1/1/94		66		136
		12/31/93		27		140
		12/1/93		49
		11/30/93		49
		10/12/93		54		140
		8/4/93		54		140
		6/30/93		56		140
		5/8/93		48		140
		12/31/92		27		140
		7/1/92		106
		5/26/92		54		140
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