Canon Holdings (UK) Limited - Limited company accounts 16.3

REGISTERED NUMBER: 02864252 (England and Wales)

Strategic Report, Report of the Director and

Financial Statements

for the Year Ended 31 December 2016

for

Canon Holdings (UK) Limited

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Statement of Director's Responsibilities

4

Report of the Independent Auditors

5

Income Statement

7

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTOR:

L Holmes

SECRETARY:

D J Bateson

REGISTERED OFFICE:

Woodhatch

Reigate

Surrey

RH2 8BF

REGISTERED NUMBER:

02864252 (England and Wales)

AUDITORS:

Ernst & Young LLP

1 More London Place

London

SE1 2AF

The director presents her strategic report for the year ended 31 December 2016.

BUSINESS REVIEW

The results for the year are set out on page 6 of the financial statements, and show a pre-tax profit of £43,606 (2015:

Profit £48,038)

PRINCIPAL RISKS AND UNCERTAINTIES

From the perspective of the company, the principal risks and uncertainties are integrated with the group and are not

managed separately. Accordingly, the principal risks and uncertainties of Canon (UK) Limited, which include those of the

company, are discussed in the accounts of Canon (UK) Limited which does not form part of this report.

KEY PERFORMANCE INDICATORS

Given the simple nature of the business, the company's directors are of the opinion that analysis using KPI's is not

necessary for an understanding of the development, performance or position of the business.

ON BEHALF OF THE BOARD:

L Holmes - Director

26 September 2017

The director presents her report with the financial statements of the company for the year ended 31 December 2016.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a holding company.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2016.

FUTURE DEVELOPMENTS

The are currently no plans to develop the business.

DIRECTOR

L Holmes held office during the whole of the period from 1 January 2016 to the date of this report.

GOING CONCERN

The directors have a reasonable expectation that the company had adequate resources to continue in operational

existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual

report and financial statements.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

The directors who were members of the board at the time of approving the directors' report are listed on page 1. Having

made enquiries of fellow directors and of the company's auditors, each of these directors confirms that:

- to the best of each director's knowledge and belief, there is no information (that is, information needed by the

company's auditors in connection with preparing their report) of which the company's auditors are unaware; and

- each director has taken all the steps a director might reasonably be expected to have taken to be aware of relevant

audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Ernst & Young LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

L Holmes - Director

26 September 2017

The director is responsible for preparing the Strategic Report, Directors' Report and the financial statements in

accordance with applicable UK law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has

elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 'Reduced

Disclosure Framework'. Under company law the director must not approve the financial statements unless she is satisfied

that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that

period. In preparing these financial statements, the director is required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject to any material departures disclosed and

explained in the financial statements;

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. She is also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

We have audited the financial statements of Canon Holdings (UK) Limited for the year ended 31st December 2016 which

comprise the Income Statement, the Statement of Comprehensive Income, the Balance Sheet and the Statement of

Changes In Equity and the related notes 1 to 13. The financial reporting framework that has been applied in their

preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting

Practice), including FRS 101 "Reduced Disclosure Framework".

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances

and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates

made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report, Report of the Directors and Audited Financial Statements to identify

material inconsistencies with the Audited Financial Statements and to identify any information that is apparently

materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing

the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications

for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2016 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 'Reduced Disclosure Framework'; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

- the information given in the Strategic Report and the Directors' Report for the financial year for which the financial

statements are prepared is consistent with the financial statements.

- the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we

have identified no material misstatements in the Strategic Report or Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received

from branches not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Mohan Pandian (Senior Statutory Auditor)

for and on behalf of Ernst & Young LLP

1 More London Place

London

SE1 2AF

26 September 2017

TURNOVER

-

OPERATING PROFIT

-

Interest receivable and similar income

3

43,606

48,296

43,606

48,296

Interest payable and similar expenses

4

-

(258

)

PROFIT BEFORE TAXATION

5

43,606

48,038

Tax on profit

6

(8,721

)

(9,728

)

PROFIT FOR THE FINANCIAL YEAR

34,885

38,310

PROFIT FOR THE YEAR

34,885

38,310

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

34,885

38,310

FIXED ASSETS

Investments

7

33,141,341

CURRENT ASSETS

Debtors

8

4,890,262

4,853,929

CREDITORS

Amounts falling due within one year

9

(6,306

)

(4,858

)

NET CURRENT ASSETS

4,883,956

4,849,071

TOTAL ASSETS LESS CURRENT
LIABILITIES

38,025,297

37,990,412

CAPITAL AND RESERVES

Called up share capital

10

37,390,242

Retained earnings

11

635,055

600,170

SHAREHOLDERS' FUNDS

38,025,297

37,990,412

The financial statements were approved by the director on 26 September 2017 and were signed by:

L Holmes - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 January 2015

37,390,242

561,860

37,952,102

Changes in equity

Total comprehensive income

-

38,310

Balance at 31 December 2015

37,390,242

600,170

37,990,412

Changes in equity

Total comprehensive income

-

34,885

Balance at 31 December 2016

37,390,242

635,055

38,025,297

1.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements of Canon Holdings (UK) Limited (the "company") for the year ended 31 December 2016

were authorised for issue by the board of directors on 11 August 2017 and the balance sheet was signed on the

board's behalf by L Holmes. Canon Holdings (UK) Limited is incorporated and domiciled in England and Wales.

The company's financial statements are presented in Sterling.

The company has taken advantage of the exemption under s.400 of the Companies Act 2006 not to prepare

group accounts. As it is a wholly owned subsidiary in its own right as part of the wider Canon Group.

The accounting policies which follow set out those policies which apply in preparing the financial statements for

the year ended 31 December 2016.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements,

as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative
information in respect of:

-

paragraph 79(a)(iv) of IAS 1; and

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

•

the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1
Presentation of Financial Statements;

•

the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;

•

the requirements of IAS 7 Statement of Cash Flows;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into
between two or more members of a group;

•

the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.

Taxation

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the

taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet

date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

A deferred tax asset of £267,000 (2015: £267,000) has not been recognised on capital losses to be carried

forward from prior years as there is currently insufficient evidence that the asset will be recoverable in the

foreseeable future within the tax group.

The Finance Act 2013 included legislation to reduce the main rate of corporation tax from 21% to 20% from 1st

April 2015 resulting in a current tax rate of 20% for the period.

The unrecognised deferred tax asset is calculated in accordance with the legislation which had been substantively

enacted at the balance sheet date, being the rate of 20%.

Fixed asset investment

Investments are stated at cost less provision for any impairment value.

The carrying value of fixed assets investments are reviewed for impairment when events or changes in

circumstances indicate the carrying value may not be recoverable.

Interest income

Revenue is recognised as interest accrues using the effective interest method. The effective interest rate is the

rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to

its net carrying amount.

Auditors remuneration

Auditors' remuneration in the current and prior years was borne by Canon (UK) Limited.

Investments

Investments in subsidiaries, associates and joint ventures are held at historical cost less any applicable provision

for impairment.

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If

any such indication exists, or when annual impairment testing for an asset is required, the company makes an

estimate of the asset's recoverable amount in order to determine the extent of the impairment loss. An asset's

recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value

in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely

independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its

recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment

losses on continuing operations are recognised in the income statement in those expense categories consistent

with the function of the impaired asset.

Trade and other debtors

Trade debtors are recognised and carried at the lower of their original invoiced value and recoverable

amount. Where the time value of money is material, receivables are carried at amortised cost. Provision for

impairment is made through profit or loss when there is objective evidence that the company will not be able to

recover balances in full. Balances are written off when the probability of recovery is assessed as being

remote.

2.	EMPLOYEES AND DIRECTORS

Apart from the directors, the company had no employees during the current or prior year.

The director received no emoluments during the year under review or the prior year from the company. The

director considers that the remuneration received from other group companies is attributable to their role as

director of Canon Holdings (UK) Limited.

3.

INTEREST RECEIVABLE AND SIMILAR INCOME

31.12.16

31.12.15

£

Other loan interest receivable

43,606

48,296

Other loan interest receivable is directly attributable to amounts received from other group companies.

4.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.16

31.12.15

£

Interest on other loans

-

258

5.	PROFIT BEFORE TAXATION

The company had no operating profit during the year under review nor for that of the prior year.

6.

TAXATION

Analysis of tax expense

31.12.16

31.12.15

£

Current tax:

Tax

8,721

9,728

Total tax expense in income statement

8,721

9,728

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is

explained below:

31.12.16

31.12.15

£

Profit before income tax

43,606

48,038

Profit multiplied by the standard rate of corporation tax in the UK of 20%
(2015 - 20.250%)

8,721

9,728

Effects of:

Tax expense

8,721

9,728

7.	INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2016

and 31 December 2016

33,141,341

NET BOOK VALUE

At 31 December 2016

33,141,341

At 31 December 2015

33,141,341

Name

Business

Holding

Canon (UK) Limited

Sales and Servicing of office equipment

79.5%

+ Canon Properties (UK) Limited

Property Investment Company

100%

+* Canon (Scotland) Business Machines
Limited (registered in Scotland)

Dormant

100%

Canon (Irl) Business Equipment Limited
(incorporated in Ireland)

Sales and Servicing of office equipment

100%

+^ Oce (UK) Limited

Non trading

100%

+^Oce Ireland Limited

Non trading

100%

+ Held by subsidiary undertaking Canon (UK) Limited.

* The trade and assets of this company were transferred to Canon (UK) Limited in 1999 and 2000.

^The trade and assets of this company were transferred to Canon (UK) Limited in 2013.

The company performed an impairment test in December 2016 on the value of its investment in Canon (UK) Ltd

due to its negative equity. Based on the test, the company concluded that the carrying value of Canon (UK) Ltd is

lower than its recoverable amount, and therefore no impairment of the investment held has been deemed

necessary. The company has determined its recoverable amount based on a value in use calculation using the

cash flow projections covering a period of five years. The pre-tax discount rate applied to cash flow projections is

9% and cash flows beyond the five-year period are extrapolated using a 2.5% growth rate that is the same as the

long-term growth rate for the industry. Key assumptions made in the calculation include:

- Steady growth in revenue

- AN EBITDA percentage similar to that has been achieved in prior years

- Minimal movements in working capital in line with prior years

- Capital expenditure similar to levels of prior years

- A pre-tax discount rate of 7.5%

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.16

31.12.15

£

Amounts owed by group undertakings

4,890,262

4,853,929

Amounts owed by group undertakings mainly consist of intercompany loans with Canon (UK) Limited which are

repayable on demand and accrue interest at a base rate plus 0.5%.

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.16

31.12.15

£

Tax

6,306

4,858

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.16

31.12.15

value:

£

37,390,242

Ordinary

£1

37,390,242

11.

RESERVES

Retained

earnings

£

At 1 January 2016

600,170

Profit for the year

34,885

At 31 December 2016

635,055

12.	RELATED PARTY DISCLOSURES

As the company is wholly owned subsidiary of Canon (UK) Limited, the company has taken advantage of the

exemption in accordance with paragraph 8(j) of Financial Reporting Standard (FRS) 101 and has therefore not

disclosed transactions or balances with entities which form part of the group.

13.	PARENT UNDERTAKING AND ULTIMATE CONTROLLING PARTY

It is the opinion of the directors that the ultimate parent undertaking and controlling party is Canon Inc., a

company incorporated in Japan, who registered office is 30-2 Shimomatuko, 3-Chome, Ohta-Ku Tokyo, 146-8501,

Japan and the immediate parent undertaking is Canon Europa NV.

The largest group into which the company is consolidated is Canon Inc. The smallest group into which the

company is consolidated in Canon Europa NV whore registered address is Bovenkerkerweg 59-61 PO Box 2262,

1180 EG Amstelveen.

The financial statements of these companies are available from their registered offices, as stated above.