This is a translation of the original convocation in Japanese language for convenience
purposes only, and in the event of any discrepancy, the Japanese language shall prevail.

49TH

NOTICE OF CONVOCATION OF
THE ORDINARY GENERAL MEETINGOF SHAREHOLDERS(Term from January 1, 2016 to December 31, 2016)

DATE AND TIME:

March 29 (Wednesday), 2017 at 10:00 a.m. (Japan time)

PLACE:

Headquarters of Canon Marketing Japan Inc.
CANON HALL S, 3rd floor of CANON S TOWER
16-6, Konan 2-chome, Minato-ku, TokyoPROPOSIONS:

Item No. 1 - Dividend from Surplus
Item No. 2 - Election of Ten Directors
Item No. 3 - Grant of Bonus to Directors
Index

 NOTICE OF CONVOCATION OF THE 49TH ORDINARY
GENERAL MEETING OF SHAREHOLDERS……………………

3

Guidance Notes on the Exercise of Voting Rights………

5

 REFERENCE DOCUMENTS FOR GENERAL MEETING OF
SHAREHOLDERS……………………………………………

7 BUSINESS REPORT…………………………………………… 13
 CONSOLIDATED FINANCIAL STATEMENTS………………… 28
 FINANCIAL STATEMENTS…………………………………… 30
 AUDIT REPORTS……………………………………………… 32
 REFERENCE………………………………………………… 35

Securities Code: 8060

To Our Shareholders
We would like to extend our sincerest gratitude to all of our shareholders for their continued support.
We, Canon Marketing Japan Inc., are pleased to present our notice to convene the 49th Ordinary General Meeting of
Shareholders.
Highlights of Consolidated Results
Consolidated financial

 Launching our Long-Term Management
Objectives Phase III

Operating profit was up thanks to growth in more
profitable businesses etc.
(Billion yen)
750

646.0

Changes

Changes

3% 

4% 

16% 

downturn over the course of this term (from January 1, 201618.2

to December 31, 2016), marked by sluggish growth in both

629.3

(Billion yen)
30

26.6

27.7

250

10

2015

2016

0

Net sales(Billion yen)
20
15

20

500

0

Looking back, there has been a continuing economic

Changes

2015

2016

15.7

consumer spending and capital investment.

10

It is against this economic backdrop that we have formulated

5

and launched our Long-Term Management Objectives Phase0

Operating income

2015

2016

Profit attributableto owners of parent

III (2016-2020), in an effort to expand our business domaineven further. In terms of individual segments, net sales wereup in Business Solutions thanks to a steady performancefrom products such as network cameras. Net sales in the IT
Solutions segment on the other hand remained level as aresult of a slump in the embedded software business. Net

Consolidated financial forecast for the fiscal year ending December 31, 2017

Increase both sales and profit by developing demand ingrowth area
(Billion yen)
750

629.3

Changes

Changes

Changes

3% 

4% 

9% 

645.0

500

(Billion yen)
30

27.7

28.8

20

250

10

0

0

2016

2017 (forecast)

Net sales

20162017 (forecast)

Operating income(Billion yen)
20

18.2

19.8

Canon Marketing Japan Inc.

due to factors such as struggling digital camera sales, andwere similarly down in the Industrial/Medical segment due
to an overhaul of low-margin products. Although this meansthat net sales were down overall, as outlined in the graph on
the left, operating income was up thanks to growth in more

15

profitable businesses and improvements in productivity.

10

We will be proposing an end-of-year dividend of 30 yen per

5share at the 49th Ordinary General Meeting of Shareholders.

02017 (forecast)A full-year dividend will be 50 yen per share, together with

Profit attributableto owners of parent

the interim dividend (20 yen per share), an increase of 5 yen

2016

Cover photo: Mikio Hasui Form the Canon Calendar 2017 "Mt. Fuji, an oasis of life: Toki no Katachi"

1sales were down in the Imaging Systems segment meanwhile

compared to our 48th business term.

 Making the most of groupwide resources
Although consumer spending and capital investment are forecast
to increase steadily in 2017, the air of uncertainty surrounding theJapanese economy is expected to linger due to factors such as thedomestic impact of overseas economies.
Given that outlook, we intend to make the most of groupwide
resources in order to tap into demand in projected high growth areas
for the future, including network cameras, commercial printing, IT
security, outsourcing, cloud-related services and medical IT solutions.
At the same time, we are aiming to increase our share of the market inexisting areas such as cameras, printers and multifunctional products(MFPs), whilst stepping up IT-led marketing and services. Throughinitiatives such as these, we expect to increase both net sales and profit
for the Group on a full-year basis, as outlined in the graph on the left.
We hope we can rely on even greater support from all of ourshareholders in the future.

March 2017

Haruo Murase

Chairman & Representative Director

Masahiro Sakata

Haruo Murase

Masahiro Sakata

President & Representative Director

Canon Marketing Japan Inc.

2

NOTICE OF CONVOCATIONTO OUR SHAREHOLDERS

Securities Code: 8060
March 6, 2017

Canon Marketing Japan Inc.
16-6, Konan 2-chome, Minato-ku, Tokyo

Haruo Murase

Chairman & Representative Director

NOTICE OF CONVOCATION OF THE 49TH ORDINARY
GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 49th Ordinary General Meeting of Shareholders of Canon Marketing Japan Inc. (the“Company”) will be held as described below and that you are invited to attend the Meeting.
If you do not expect to attend the Meeting, you may exercise your voting rights in writing or by the Internet, etc. After
reviewing the following Reference Documents for General Meeting of Shareholders, please exercise your voting rights
by no later than 5:30 p.m. on March 28 (Tuesday), 2017 (Japan time).

1. DATE AND TIME:

March 29 (Wednesday), 2017 at 10:00 a.m. (Japan time)

2. PLACE:				

Headquarters of the Company
CANON HALL S, 3rd floor of CANON S TOWER
16-6, Konan 2-chome, Minato-ku, Tokyo

3. MATTERS CONSTITUTING THE PURPOSE OF THE MEETING
Matters to be Reported:

1. Reports on the contents of the Business Report and Consolidated Financial Statements
for the 49th Business Term (from January 1, 2016 to December 31, 2016), and reports on
the Auditing Results of Accounting Auditor and Audit & Supervisory Board regarding theConsolidated Financial Statements.

		

2. Reports on the content of the Financial Statements for the 49th Business Term (fromJanuary 1, 2016 to December 31, 2016).

Matters to be Resolved upon:
Propositions: Item No. 1 - Dividend from Surplus
		 Item No. 2 - Election of Ten Directors
		 Item No. 3 - Grant of Bonus to Directors

3

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

 Upon attending the Meeting, please present the enclosed Voting Form to the receptionist at the place of the
Meeting.
 About the procedures for the exercise of voting rights in writing or by the Internet, etc, please see the following
pages.

Consolidated Financial
Statements

Business Report The following items are posted on the Company’s website (http://cweb.canon.jp/ir/index.html) in accordance withthe related laws and regulations and Article 14 of the Company’s Articles of Incorporation and are therefore notincluded in the documents attached to this Notice:(1) Systems for Ensuring Propriety of Operations and Outline of the Activities to be described in the Business Report(2) Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements(3) Statement of Changes in Net Assets and Notes to Non-Consolidated Financial Statements
Items (1) through (3) above are part of the Business Report, Consolidated Financial Statements and Financial
Statements, which Audit & Supervisory Board Members audited to prepare their audit reports, and items (2) and (3)above are part of Consolidated Financial Statements and Financial Statements, which Accounting Auditor audited toprepare its audit reports.

Reference

Audit Reports

Financial Statements

 Any revisions to the Reference Documents for General Meeting of Shareholders, Business Report, Consolidated
Financial Statements and Financial Statements will be posted on our website on the Internet (http://cweb.canon.jp/
ir/index.html).

Canon Marketing Japan Inc.

4

NOTICE OF CONVOCATION

Guidance Notes on the Exercise of Voting Rights
Your voting rights to be exercised at the General Meetings of Shareholders are important rights. After reviewing the following
Reference Documents for the General Meeting of Shareholders (pages 7-12), please exercise your voting rights.

 The Voting rights can be exercised in one of the following three ways
Please bring and present the enclosed Voting Form to the receptionist at the place of the Meeting.

Exercise of Voting
Rights by Attending
the Meeting

DATE AND TIME:

March 29 (Wednesday), 2017 at 10:00 a.m. (Japan time)

PLACE:

Headquarters of the Company
CANON HALL S, 3rd floor of CANON S TOWER
16-6, Konan 2-chome, Minato-ku, Tokyo

Please indicate your for/against for each of the propositions on the enclosed Voting Form

Exercise of Voting
Rights in Writing(Via Postal Mail)and return it by postal mail.
Deadline for exercising
voting rights:

The Voting Form must reach us no later than
5:30 p.m. on March 28 (Tuesday), 2017 (Japan time)

Please enter your for/against for each of the propositions on the website for the exercise

Exercise of Voting
Rights by Electromagnetic Means(Via the Internet)of voting rights (http://www.it-soukai.com) and send it.
Deadline for exercising
voting rights:

The exercise of voting rights must be made no later than
5:30 p.m. on March 28 (Tuesday), 2017 (Japan time)

Guidance Notes on the Exercise of Voting Rights via the Internet, etc.

I. Exercise of voting rights via the Internet
1. Items Required to be Agreed on for the Exercise of Voting Rights via the Internet(1) You may exercise your voting rights via the Internet only through the website for exercising voting rights specified by
the Company (http://www.it-soukai.com). When exercising your voting rights via the Internet, the code for the exercise
of voting rights and the password described at the bottom right of the enclosed voting form are required.
(2) The code for the exercise of voting rights and the password are only valid for this Meeting. At the time of the next
meeting, new code and password will be issued.
(3) If you exercise your voting rights both, in writing and via the Internet, regardless of the time of arrival, we will treat theexercise of your voting rights via the Internet as effective.

5

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders(4) If you exercise your voting rights more than once via the Internet, we will treat the last exercise of your voting rights aseffective.
(5) The cost of Internet access (access fees to providers, telecommunications fees, etc.) shall be borne by the shareholders.
(6) Please note that you may not be able to exercise your voting rights via the Internet depending on your Internet
environment. In addition, please note that you cannot exercise your voting rights via the Internet by a mobile phone.

2. Specific Procedures to Exercise Your Voting Rights via the Internet

Business Report(1) Access the website (http://www.it-soukai.com)(2) Enter the code for the exercise of voting rights and the password described on the enclosed Voting Form and click on
the “Log-in” button.
(3) Exercise your voting rights by following the directions on the screen no later than 5:30 p.m. on March 28 (Tuesday),2017 (Japan time).

3. Security

Consolidated Financial
Statements

You may exercise your voting rights safely due to the encryption technology(SHA-2) used to protect your voting
information from being leaked or tampered with.
The code for the exercise of voting rights and the password described on the voting form are very important toauthenticate shareholders, so please ensure that you do not disclose them to others. Please note that the Company does
not make any inquiries regarding your password.

4. Contact Information for Inquiries

Audit Reports

Financial Statements(1) For inquiries with respect to the operation of personal computer to exercise of the voting rights via the Internet.
Please contact:
Internet Help Dial: Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd.
Telephone: 0120-768-524 (toll-free)
Operating Hours: 9:00 a.m. to 9:00 p.m. (excluding Saturdays, Sundays and national holidays)(2) For inquiries other than the (1) above, such as address change, etc.
Please contact:
Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd.
Telephone: 0120-288-324 (toll-free)
Operating Hours: 9:00 a.m. to 5:00 p.m. (excluding Saturdays, Sundays and national holidays)

II. Platform for Electronic Exercise of Voting Rights

Reference

The electronic voting platform for institutional investors operated by Investor Communications Japan Inc. is available fornominee shareholders such as trust & custody services banks, etc. (including standing proxies) that have applied to use
such platform in advance.

Canon Marketing Japan Inc.

6

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Item No. 1: Dividend from Surplus
We have comprehensively considered the business results, etc. for this Business Term, and propose a term-end dividend
as described below.
Thus, the full-year dividend will be 50.00 yen per share, which includes an interim dividend of 20.00 yen per share.
Although it is provided in the Articles of Incorporation that the dividend from surplus, etc. may be decided by aresolution of the board of directors, we have made it a matter to be resolved at this Meeting to have an opportunity tohear the shareholders’ views directly.

7

Cash

1

Type of dividend:2Matters concerning allocation ofdividend and its total amount:

30.00 yen per one common share of the Company
Total amount of dividend 3,890,128,530 yen

3Effective date of the dividend fromsurplus:

March 30, 2017

Canon Marketing Japan Inc.

Notice of Convocation

Item No. 2: Election of Ten Directors
The term of offices of all of the ten Directors will expire at the end of this Meeting. We would like you to elect ten( Nov. 29, 1939 )Number of the Company’s shares held:
94,600 shares

Masahiro Sakata

2( Apr. 11, 1953 )Number of the Company’s shares held:
24,300 sharesBusiness Report
Consolidated Financial
Statements

1

As of
Apr. 1963: Entered Canon Inc.
Mar. 1991: Director of Canon Inc.
Mar. 1996: Managing Director of Canon Inc.
Mar. 1999: President & Representative Director
Mar. 2009: Chairman & Representative Director (present)
Mar. 2011: Executive Chairman<Reason for Nomination as Director>
Mr. Murase was in charge of the management of overseas operation of Canon Inc. for many years. He held
the posts of President & Representative Director and Chairman & Representative Director, and acted as the
Chairman of the Board of Directors of the Company. Further, he has considerable experience as an
executive, knowledge of management for the Company and excellent expertise. Thus, he has again been
selected as a candidate for a Director.

Financial Statements

Haruo Murase

Brief personal record, position, business in charge
and important concurrent posts

As ofApr. 1977: Entered the Company
Mar. 2006: Director
Mar. 2009: Managing Director
Mar. 2011: Director & Senior Vice President
Mar. 2013: Director & Senior Vice President
Apr. 2013: Company President of Business Solution Company
Mar. 2015: 	President & Representative Director and Executive President (present)

Audit Reports

Name(Date of birth)<Reason for Nomination as Director>
Mr. Sakata led the Business Solution business for many years. He has managed the Company as the
President & Representative Director, and has considerable experience, knowledge of management for theCompany and excellent expertise. Thus, he has again been selected as a candidate for a Director.

Canon Marketing Japan Inc.

Reference

Candidate
No.

Reference Documents For General
Meeting of Shareholders

Directors.
The candidates for the Directors are as follows:

8

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Candidate
No.

Name(Date of birth)

Yutaka Usui3
( Nov. 29, 1953 )Number of the Company’s shares held:
15,800 shares

Koichi Yagi

4
( Jul. 27, 1954 )Number of the Company’s shares held:
8,800 shares

Akihisa Kamimori

5( Aug. 9, 1952 )Number of the Company’s shares held:
7,800 shares

9

Canon Marketing Japan Inc.

Brief personal record, position, business in charge
and important concurrent posts
As ofApr. 1977: Entered Canon Inc.
Mar. 2007: Director
Mar. 2011: Senior Vice President
Mar. 2014: Director (present)
Apr. 2015:	Director in charge of General Administration & Human Resources
Management Headquarters and CSR Headquarters (present)
Mar. 2016: Senior Vice President (present)
Apr. 2016: 	Director in charge of Legal and Intellectual Property Headquarters,
Procurement Headquarters, and Logistics Center (present)<Reason for Nomination as Director>
Mr. Usui led the Human Resources field for many years. He has overseen a number of different
management headquarters at head office, and has considerable experience and knowledge ofmanagement for the Company. Thus, he has again been selected as a candidate for a Director.

As ofApr. 1978: Entered Canon Inc.
Mar. 2010: Director
Mar. 2011: Vice President
Mar. 2013: Senior Vice President (present)
Mar. 2014: Director (present)
Apr. 2014: Company President of Imaging Systems Company (present)<Reason for Nomination as Director>
Mr. Yagi led the Imaging System business for many years. He has held the posts of Director and Executive
Officer, and has considerable experience and knowledge of management for the Company. Thus, he has
again been selected as a candidate for a Director.

As ofApr. 1979: Entered the Company
Apr. 2008: Director of Canon IT Solutions Inc.
Mar. 2011: Vice President
Mar. 2013: Senior Vice President (present)
Mar. 2015: Director (present)
President & Representative Director of Canon IT Solutions Inc. (present)
Apr. 2016: Company President of ITS Company (present)<Reason for Nomination as Director>
Mr. Kamimori led the IT Solution business of Canon MJ Group for many years.
He has held the posts of Director and Executive Officer, and has considerable experience and knowledgeof management for the Company. Thus, he has again been selected as a candidate for a Director.

Number of the Company’s shares held:
12,957 shares

Masachika Adachi

7( Mar. 30, 1960 )Number of the Company’s shares held:
6,142 shares

Shiro Hamada

8( Aug. 31, 1961 )Number of the Company’s shares held:
3,752 shares

Notice of Convocation
Reference Documents For General
Meeting of Shareholders<Reason for Nomination as Director>
Mr. Matsusaka led Corporate Planning field and Public Relations field for many years. He has held the postsof Director and Executive Officer, and has considerable experience and knowledge of management for theCompany. Thus, he has again been selected as a candidate for a Director.

Business Report( Nov. 12, 1956 )As ofApr. 1982: Entered the Company
Jul. 2009: 	Group Executive of MA Business Sales Headquarters, Business Solutions
Company
Mar. 2013: Vice President
Apr. 2013:	Director in charge of Business Solution Direct Sales Management Segment,
Business Solutions Company (present)
Mar. 2015: Director & Senior Vice President (present)
Apr. 2015: Company President of Business Solutions Company (present)

Consolidated Financial
Statements

6

As of
Apr. 1979: Entered the Company
Apr. 2005: Group Executive of Communications Headquarters
Mar. 2013: Vice President
Mar. 2015: Director & Senior Vice President (present)
Apr. 2015: Director in charge of Communications Headquarters
Jul. 2016: Director in charge of Corporate Planning Headquarters(present)
Jan. 2017: Director in charge of Brand Communications Headquarters (present)

Financial Statements

Yoshiyuki Matsusaka

Brief personal record, position, business in charge
and important concurrent posts<Reason for Nomination as Director>
Mr. Adachi led the Business Solution business for many years. He has held the posts of Director andExecutive Officer, and has considerable experience and knowledge of management for the Company.
Thus, he has again been selected as a candidate for a Director.

As ofApr. 1984: Entered the Company
Apr. 2011: 	Deputy Chief Executive of Administrative Headquarters of Canon IT Solutions
Inc.
Jul. 2013: Group Executive of Accounting Headquarters (present)
Apr. 2015: Executive Officer
Mar. 2016: Director & Vice President (present)

Audit Reports

Name(Date of birth)<Reason for Nomination as Director>
Mr. Hamada led the Finance and Accounting field for many years. He has held the posts of Director andExecutive Officer, and has considerable experience and knowledge of management for the Company.
Thus, he has again been selected as a candidate for a Director.

Canon Marketing Japan Inc.

Reference

Candidate
No.

10

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Candidate
No.

Name(Date of birth)
Candidate for Outside Director

Norihisa Doi

9

Brief personal record, position, business in charge
and important concurrent posts
As ofApr. 2003: Professor Emeritus of Keio University (present)
Oct. 2003: Chairperson of the NPO Japan Information Security Audit Association (present)
Jun. 2005: 	Program Director of a Research and Development Program of theFundamental Technology for Realization of Future Society, the Ministry of
Education, Culture, Sports, Science and Technology (present)
Apr. 2009: 	Advisor to the Director General of the Research Institute of Science andTechnology for Society, the Japan Science and Technology Agency (present)
Mar. 2014: Director of the Company (present)<Reason for Nomination as Director>( Jul. 11, 1939 )Number of the Company’s shares held:
1,400 shares

Candidate for Outside Director

Akio Dobashi

10( Jan. 2, 1949 )Number of the Company’s shares held:
None

Mr. Doi has not been directly involved in company management other than becoming an outside director. However,
we assessed that he could accomplish the duties as the Outside Director appropriately from his experience and wide
knowledge as an university professor and the scientific organization executives, etc. Thus, he has again been selected
as a candidate for an Outside Director. His term as an Outside Director will be three years as of the close of thisMeeting.

As ofApr. 1972: Entered Nichimen Company, Limited (present Sojitz Corporation)
Apr. 2003: 	Executive Officer of Nissho Iwai - Nichimen Holdings Corporation
Representative and Senior Managing Director and Senior Managing Executive
Officer of Nichimen Corporation
Dec. 2003: President and Representative Director, CEO of Nichimen Corporation
Apr. 2004: Representative Director, President & CEO of Sojitz Corporation
Jun. 2004: Director (part-time) of Nissho Iwai - Nichimen Holdings Corporation
Jul. 2004: 	Director (part-time) of Sojitz Holdings Corporation (name changed fromNissho Iwai - Nichimen Holdings Corporation)
Jun. 2005: Representative Director, President & CEO of Sojitz Holdings Corporation
Oct. 2005: 	The corporate name was changed to Sojitz Corporation due to the merger ofSojitz Holdings Corporation and Sojitz Corporation
Representative Director, President & CEO of Sojitz Corporation
Apr. 2007: Representative Director and Chairman of Sojitz Corporation
Apr. 2012: Director of Sojitz Corporation
Jun. 2012: Senior Corporate Advisor of Sojitz Corporation
Jun. 2014: Corporate Advisor of Sojitz Corporation (present)
Jun. 2015: Director of OSJB Holdings Corporation (present)
Mar. 2016: Director of the Company (present)<Important concurrent post>
Director of OSJB Holdings Corporation<Reason for Nomination as Director>
Mr. Dobashi has actively performed as a top executive at a general trading company for many years. He has
considerable experience and excellent expertise in company management.
We assessed that he could accomplish the duties as the Outside Director appropriately from such experience andexcellent expertise. Thus, he has again been selected as a candidate for an Outside Director. His term as an Outside
Director will be a year as of the close of this Meeting.

Notes:
1. None of the candidates for the Directors have any special interest in the Company.

11

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

2. Should Mr. Norihisa Doi and Mr. Akio Dobashi be elected, the Company will make both of them independent directors under the regulation of theTokyo Stock Exchange, Inc. They both meet the Company’s independence standards for independent directors. The relevant standards are available
on the Company’s website (http://cweb.canon.jp/eng/ir/management/governance.html).
3. The Company has entered into a contract with Mr. Norihisa Doi limiting the amount of his damages compensation liability defined in Paragraph1,
Article 423 of the Companies Act to the limit prescribed by laws and regulations. Should he be elected, the Company will continue theaforementioned contract with him. Should Mr. Akio Dobashi be elected, the Company will continue the aforementioned contract with him under thesame conditions.

Item No. 3: Grant of Bonus to Directors
It is proposed that bonus be granted to the eight Directors excluding the Outside Director as of the end of this term, in

Reference

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

appreciation of their services during this business term, which totals 70,650,000 yen considering the business results forthis business term, etc.

Canon Marketing Japan Inc.

12

Documents provided in accordance with Articles 437 and 444 of the Companies Act

BUSINESS REPORT (January 1, 2016 to December 31, 2016)
1. Current Conditions of Canon Marketing Japan Group (the “Group”)(1) Business Progress and Results
 General Business Conditions
Looking back at the Japanese economy over this Term, there
has been a continuing sense of economic stagnation, due
in part to slow recoveries in both consumer spending andcapital investment.
It is against this economic backdrop that we have been
actively focusing on increasing sales of new products andoffering a range of solutions in line with the following
six basic management policies, as set out in Long-Term
Management Objectives Phase III (2016-2020) and have been
actively focusing on the following priorities.
(1) Become the “true partner” of our customers(2) M aintain the high profitability base of Canon’s
Profitability Growth Areas(3) Turn Canon Growth Areas into core businesses(4) Expand IT solution business using the Group’s collective
abilities(5) A ggressively implement business structure/process
reforms(6) B ecome a corporate group where employees work
more energetically
As a result of factors such as a delayed recovery in consumer
spending however, net sales totaled 629,313 million yen(down 2.6% from the previous term).
In terms of income meanwhile, we maintained steadyfigures for more profitable services and solutions, increased
productivity through improved operational efficiency andcut overheads, enabling us to achieve operating income of
27,676 million yen (up 3.9%) and ordinary income of 28,717
million yen (up 2.4%). Profit attributable to owners of parent
came to 18,161 million yen (up 15.9%).

Financial
Ordinary income

Operating income

Net sales(Billion yen)
800

(Billion yen)
30

(Billion yen)
30

25

25

20

20

15

15

10

10

5

5

Profit attributable toowners of parent

Profit attributable to owners of parent per share
(Yen)
150

600

400

100

50

200

0

13

2012

2013

2014

2015

Canon Marketing Japan Inc.

2016

0

2012

2013

2014

2015

2016

0

2012

2013

2014

2015

2016

0

2012

2013

2014

2015

2016

Operating income

Notice of Convocation

Business Solutions

Net sales

330,334 million yen
11,362 million yen

Reference Documents For General
Meeting of Shareholders

 Business Conditions by Operation

Business Solutions

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Reportprinter products. Due to a decline in shipments of printers todesign firms however, sales have remained at the same level
as the previous term.
The laser printer market hasremained sluggish, with theGroup sales down on the previous
term. We have nonethelessbeen working to increase salesof models such as the “Satera
Satera LBP8730i
LBP8730i” monochrome printer,and have also launched newmodels, including the “Satera LBP352i”, the fastest printer inthe series to date. Thanks to our efforts to develop the market
for fast, high-volume printing, we have secured the leading
share of the market overall. Sales of toner cartridges wereup on the previous term due to factors such as an increasein shipments to specific industries printing large volumes,
including the distribution and medical industries.
In the network camera business, we sell devices for a wide
variety of purposes, including security and marketing, as
well as providing services and support. In addition to crime
prevention and surveillance cameras themselves, this term
we have maintained healthy sales of image management
software and have seen an increase in sales on the previous
term.
While maintenance service fees continue to fall, sales ofmaintenance services for office MFPs and other such products
were up slightly on the previous year thanks to a steady rise inprinting volumes, due in part to an increase in the number ofdevices in operation in the market.

ReferenceIn the domestic market forcore products in the businesssolutions segment, sales ofoffice multifunctional products(MFPs) remained healthy thanks
to orders from large companies
and public bodies. Because of aimageRUNNER ADVANCE C5560F
slump in demand from small
and medium-sized companies
however, shipments were downon the previous term overall. Shipments of laser printers weresimilarly down on the previous term, due to a continuing
trend towards offices shifting to MFPs, as well as sluggish
demand in the private sector.
As for the Group, we have been focusing on increasing
sales and securing new customers for the “C3300” series ofcompact MFPs for small and medium-sized companies, andthe new “C5500” series of products also for medium-sizedcompanies, both of which are part of our “imageRUNNERADVANCE” series of color office MFPs. As rental devices havecontinued to increase as a percentage of shipments however,sales were down slightly on the previous term.
In the production printing business, we sell production MFPs,
continuous feed printers, large inkjet printers and other suchproducts aimed at markets including commercial printing,in-house printing and critical record printing, as well as
offering services and support. This term, we have maintained
healthy sales of color-on-demand models for the printing
industry, including
the “imagePRESS
C800/C650” and“imagePRESS
C10000VP,” and wehave also launched
new continuous feed
imagePRESS C10000VP

As a result, net sales in this segment totaled 330,334 million
yen (up 1.1% from the previous term), with operating income
coming in at 11,362 million yen (up 26.4%).

Canon Marketing Japan Inc.

14

BUSINESS REPORT Business Conditions by Operation

IT Solutions

Net sales

140,842 million yen

Operating income

4,854 million yen

IT Solutions

The domestic IT solution market performed well this term,<Embedded Systems Business>with continued growth in IT services and package software,

In terms of our embedded systems business, we develop

and strong sales to large companies, outweighing negative

software that is designed to be embedded in products.

growth in hardware.

Despite stepping up efforts to target the automotive industry,<SI Services Business>

net sales were down from the previous term, due to a slump

In terms of our SI services business, we develop systems

in orders from major customers in thefrom scratch or use solution packages to suit customers’

manufacturing industry.

individual needs. Net sales were up from the previous term,<Products Business>due to an increase in orders for financial institutions and the

In terms of our product business,

manufacturing industry.

we sell IT-related hardware, package<IT Infrastructure and Services Business>

software and licenses. In spite of

In terms of our IT infrastructure and services business, we

healthy sales of products such asprovide data center services, cloud-related services, system“ESET” security software, net sales

platform construction services, system operating services,

remained level this term due to the impact of changes inand business process outsourcing (BPO) services. Net salescommercial distribution for certain products.

were up on the previous term, due to factors such as securing
major orders and steady sales in the data center services.

“ESET” security software

As a result, net sales in this segment totaled 140,842 million
yen (down 0.3% from the previous term), with operating
income coming in at 4,854 million yen (up 17.4%).
Net sales for this segment include 26,663 million yen frominternal sales or transfers between segments.

Nishi-Tokyo Data Center

15

Canon Marketing Japan Inc.

Imaging Systems

Notice of Convocation

159,206 million yen

Net sales
Operating income

10,887 million yen

Reference Documents For General
Meeting of Shareholders

 Business Conditions by Operation

Imaging Systems<Digital Cameras><Inkjet Printers>

Shipments of interchange-

Shipments of inkjet printers onable lens digital cameras on

the domestic market were down
downturn in the market. Despite

net sales being down during the first three quarters (January

in consumer spending and

to September), net sales were only down slightly from thecertain manufacturers being forced to reduce production

previous term. This was due in part to recording healthy sales

following the Kumamoto earthquake. We launched the “EOSof high priced products as demand peaked during the fourth

5D Mark IV” as a new high-end amateur model, and focusedquarter of the year (October to December), including theon increasing sales throughnew “PIXUS TS9030” and the “PIXUS TS8030”, coupled withmeasures such as expanding

strong sales of the “MAXIFY”

our range of mirrorlessbusiness inkjet printer series.

cameras with the release of

We also successfully maintained

the “EOS M5”. Although we

our leading share of the market.
Sales of inkjet cartridges wereAn advertisement of EOS M5

down on the previous term, due
MAXIFY MB5430

net sales were down from the previous term due to theto a decline in printers and amarket itself underperforming.

reduction in printing volumes.

Shipments of compact digital cameras on the domestic<Commercial Imaging Equipment>

market were down significantly on the previous term, due

Net sales were down from the previous term as a result ofin part to a dip in production in Kumamoto following thesluggish demand for broadcast lenses, due in part to a decline

earthquake and a prolonged dip in demand. These samein orders from broadcasters.

Audit Reports

successfully maintained ourleading share of the market,

Financial Statements

due to factors such as a slump

EOS 5D Mark IV

Consolidated Financial
Statements

down on the previous term

PIXUS TS9030

Business Reporton the previous term due to athe domestic market weretoo, driving down shipments and resulting in a drop in sales

As a result, net sales for this segment totaled 159,206 million

from the previous term. We nonetheless maintained ouryen (down 10.9% on the previous term), with operating

leading share of the market.

income coming in at 10,887 million yen (down 21.3%).
Canon Marketing Japan Inc.

Referencefactors had a major impact on production of our products

16

BUSINESS REPORT Business Conditions by Operation

25,568 million yen

Net sales

Industrial/Medical

122 million yen

Operating income

Industrial/Medical<Industrial>

net sales were down on

Net sales were up on the previous year, thanks to strong

the previous term due tosales of products such as semiconductor manufacturingchanges in the way weequipment, testing and measuring systems, as well as steadyhandle certain low-margin

sales of maintenance services and repair parts.

products.

<Medical>As a result, net sales for

In spite of steady sales ofthis segment totaled

products such as digital

25,568 million yen (down 5.8% on the previous year), withradiography (digital

operating income coming in at 122 million yen (compared to

x-ray cameras) and nonmydriatic retinal cameras,

Non-mydriatic retinal cameras

an operating loss of 742 million yen the previous term).
Semiconductor manufacturing equipment

Constitution of Sales by Operations
Industrial/Medical

4%
Net sales 25,568 million yen

Imaging Systems

24%

50%

Net sales 159,206 million yen

Net sales 330,334 million yen

IT Solutions

22%
Net sales 140,842 million yen

17Business Solutions

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders(2) Facilities Investment
The investment in facilities by the Group during this Term totaled 11,737 million yen, which are mainly as rented assets, tools,
fixtures and fittings, and ancillary facilities at our Nishi-Tokyo Data Center.

Consolidated Financial
Statements

Business Report(3) Issues to Address
In spite of a gradual recovery in consumer spending and capital investment, conditions are likely to remain uncertain in theJapanese economy, due in part to the domestic impact of overseas economies. Against this economic backdrop, our top priority
as the Group is to build on our various strengths, including our strong customer base, our range of highly competitive Canon
products, and our IT capabilities, to expand our business domain even further. To achieve that, we have made it our Group
Mission under our Long-Term Management Objectives Phase III (2016 to 2020) to “help resolve social issues with advanced
imaging & IT solutions,” and are committed to expanding our business based on our Group Vision; “the Canon Marketing Japan
Group understands and grows with its customers.”
To achieve the basic policies set out under our Long-Term Management Objectives Phase III, we have also formulated ThreeYear Management Plan (2017-2019). One of the plan’s aims is to transition from a conventional organizational structure basedon products and sales channels, towards a new organizational structure driven by markets and customers, to enable us to adapt
precisely to changes in the market environment. Through this approach, we intend to offer solutions based on market needs,
achieve sales growth and improve margins. To achieve that, we will be focusing on the following strategic priorities.

Audit Reports

Financial Statements[Sales growth](1) Building on the Group’s customer base and solution-led capabilities to strengthen our network camera business, throughmeasures such as increasing specialist staff, and stepping up collaboration with companies including Axis AB and Milestone
Systems A/S(2) Expanding our production printing business, through measures such as extending our range of products in line with demandfor commercial and industrial printing, and reinforcing our sales structure(3) Expanding IT solutions in the medical sector, by consolidating medical-related organizations within the Group and steppingup customer service capabilities for medical institutions(4) Making the most of the Group’s resources to develop our IT security and outsourcing businesses across a wide range ofmarkets(5) Harnessing our strong customer base and IT capabilities to increase business with large companies, by offering tailoredsolutions for specific industries such as finance, manufacturing and distribution(6) Providing an extensive range of solutions at the Group’s disposal in areas such as IT maintenance services, cloud-related
services, computer aided design (CAD) and security, to meet growing demand for IT system development and operation
amongst small and medium-sized companies

Canon Marketing Japan Inc.

Reference[Improving margins](1) Improving profitability from our consumer business, through measures such as increasing our market share in areas including
digital cameras and inkjet printers, and stepping up digital marketing based on customer relationship management (CRM)
and IT

18

BUSINESS REPORT(2) Improving profitability from our document business, through measures such as securing new MFP customers amongst
medium-sized companies, developing priority industries in areas including distribution and healthcare by providing industryspecific laser printer solutions, making effective use of internet-based remote maintenance services, and shifting personnel
towards growth areas(3) Pushing ahead with reforms, through measures such as reforming business processes, developing efficient next generation IT
systems, optimizing groupwide frameworks in areas such as after-sales service and call centers, restructuring distribution, andconsolidating facilities
We are determined to implement these strategic priorities as the Group, as we work to expand our business and improve ourresults.

 Three-Year Management Plan Consolidated Financial Targets
Net sales

Operating income(Billion yen)

1,000

Ordinary income(Billion yen)

ActualChanges-2.6%

800(totals rounded to the nearest unit)

629.3

50

Three-Year Management Plan target

Changes
2.5%

645.0

Changes
4.5%

Changes
3.9%

700.0

670.0

(Billion yen)

Actual40
Profit margin
4.4%

50

Three-Year Management Plan target

Profit margin
4.5%

28.8

Profit margin
4.6%

Profit margin
4.9%

30.6

400

20

20

200

10

10

2016

2017

2018

2019

Profit attributable to owners of parent

24
18

2016

2017

2018

2019

(Yen)

ActualProfit margin
2.9%

18.2

Three-Year Management Plan target

Profit margin
3.1%

19.8

Profit margin
3.1%

Profit margin
3.3%

23.0

20.7

250

0

10

Three-Year Management Plan target

177
140

153

50

2

2019

0

2016

2017

ActualCanon Marketing Japan Inc.

2018

2019

Three-Year Management Plan target

2018

2019

0

2016

* ROE: Return on Equity, used as in indicator of how much a company makes as a result of money invested by its shareholders

19

35.2

31.8

6.8

6.9

7.1

2017

2018

2019

6

6

2018

2017

6.5

4

2017

2016

8

160

100

2016

29.6

Profit margin
5.0%

ROE*

12

0

28.7

Profit margin
4.7%

(%)
Actual200
150

Profit margin
4.6%

30

Profit attributable to owners of parent per share(Billion yen)30

0Profit margin
4.6%

40

30

0

Three-Year Management Plan target

34.0

600

27.7

ActualNotice of Convocation(4) Status of Assets and Earnings
47th Busines Term

48th Busines Term

49th Busines Term

(Jan. 1, 2013 toDec. 31, 2013)(Jan.1, 2014 toDec.31, 2014)(Jan. 1, 2015 toDec. 31, 2015)(Jan. 1, 2016 to
Dec. 31, 2016)

659,218

657,215

659,432

646,002629,313

16,802

17,01225,087

26,647

27,67618,10818,21026,55328,04028,717

10,578

10,167

16,03015,67018,161

77.45

76.67

123.62120.84140.06

462,574

467,076

479,747

486,502497,727

254,088257,075

270,352

277,438

280,919

Business Report

46th Busines Term

(Jan. 1, 2012 toDec. 31, 2012)

Consolidated Financial
Statements

Net sales(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)
Profit attributable to ownersof parent (Millions of yen)
Profit attributable to ownersof parent per share (yen)Total assets(Millions of yen)
Net assets(Millions of yen)

45th Busines Term

Reference Documents For General
Meeting of Shareholders

 Consolidated

Financial Statements

Note : 1. From the 46th Business Term, a part of the sales incentives accounted for under selling and general administrative expenses have been changed to be
deducted from net sales (presenting net basis). Therefore, the of figures for 45th Business Term are adjusted retroactively.
2. Profit attributable to owners of parent per share is calculated based on the weighted average number of outstanding shares during the term.
3. Effective from the fiscal year ended December 31, 2016, the Company has applied the “Accounting Standard for Business Combinations” (ASBJ Statement
No. 21, September 13, 2013) and other standards. As a result, the presentation of “Profit” has been changed to “Profit attributable to owners of parent”(5) Main Activities

Business Solutions

Office Multifunction Products, Small Office Multifunction Products, Production Office Multifunction
Products, Continuous Feed Printers, Laser Printers, Large-Format Inkjet Printers, Office-use Facsimiles,
Liquid Crystal Projectors, Document Scanners, Industrial Printers, Teleconference System, Network
Cameras, Document Solutions, Maintenance Services

IT Solutions

SI Services Business, IT Infrastructure and Services Business, Embedded Systems Business(developmentof software that is embedded in products), Products Business

Imaging Systems

Digital Cameras, Interchangeable Lenses, Digital Camcorders, Inkjet Printers, Compact Photo Printers,
Personal Scanners, Calculators, Commercial Imaging Equipment

Industrial/Medical

Semiconductor Manufacturing Equipment, Tasting and Measuring Systems, 3D Printers, Digital
Radiography Systems (Digital X-ray Cameras), Ophthalmic Equipment, Medical Systems, Sterilization
Products, Packaging Machines
Canon Marketing Japan Inc.

Audit Reports

Major Products / Services

Reference

Segment

20

BUSINESS REPORT(6) Main location of Operations
 The Company

 Principal Subsidiaries

Headquarters

Tokyo

Canon System & Support Inc.

Makuhari Office

Chiba

Canon Production Printing Systems Inc.

Sapporo Branch

Hokkaido

Canon IT Solutions Inc.

Sendai Branch

Miyagi

Nagoya Branch

Aichi

Osaka Branch

Osaka

Hiroshima Branch

Hiroshima

Fukuoka Branch

Fukuoka

Konan OfficeTokyo

Canon Lifecare Solutions Inc.

(7) Employees
 Consolidated

21

Number of Employees

Change from the end of the previous term

17,887 persons

Decrease of 214 persons from the previous term

Segment

Number of Employees

Change from the end of the previous term

Business Solutions

9,637 persons

Increase of 58 persons from the previous term

IT Solutions

5,233 persons

Decrease of 52 persons from the previous term

Imaging Systems

1,490 persons

Decrease of 73 persons from the previous term

Industrial/Medical

579 persons

Decrease of 62 persons from the previous term

Other948 persons

Decrease of 85 persons from the previous term

Canon Marketing Japan Inc.

Parent
Location
Company Name
Canon Inc.

Ohta-kuTokyo

Notice of Convocation

Number of Voting Rights

Activities(Ratio of Voting Rights)

Development and production in
the field of the office, imaging
systems and industrial equipment

757,086(58.5%)

Reference Documents For General
Meeting of Shareholders(8) Parent Company and Principal Subsidiaries
 Parent Company
Relation with the Company
The Company is comprehensively conducting to sales,
services and marketing of the products manufacturedby the Parent Company in the Japan market.

 Matters about the Transactions with Parent Company, etc.

Consolidated Financial
Statements

Business Report

The Company holds the exclusive right to sell within Japan all products, excluding semiconductor exposure devices and liquid crystal
substrate exposure devices, manufactured by Parent Company under the Canon brand.
In purchasing such products, the terms are negotiated and determined for each year by presenting the preferred prices from the Company
taking into account market prices.
The Company sells consumables for office equipment to the Parent Company based on the same terms as regular transactions.
The Company lends funds to the Parent Company by the interest rates determined reasonably taking into account market rates.
Thus, the board of directors assesses that the Company is conducting business activities and making management decisions based on the
Company’s own management judgments, certain independence from the Parent Company is secured, and the Company’s profit is notharmed in the transactions with the Parent company.

 Subsidiaries
BusinessCanon System & Support Inc.

4,561

100.0

Consultation of a solution, sale, support and maintenance service, mainly
for Canon products

Canon Production Printing
Systems Inc.

2,744

100.0

Sales of production printing equipment and consumables, maintenanceservice, development and provision of workflow systems, etc. and printing
service, etc.

Canon IT Solutions Inc.

3,617

100.0

SI and consulting, IT service and development and sale of various softwares

Canon Lifecare Solutions Inc.

2,533

100.0

Sales of medical equipment, healthcare related equipment andconsumables and medical image systems

Financial Statements

Capital Stock Ratio of Voting Rights(millions of yen) of the Company (%)

Audit Reports

Company Name

 Consolidated Status

Canon Marketing Japan Inc.

Reference

1. The number of consolidated subsidiaries was 24.
2. The Company succeeded its GB sales headquarters to Canon System & Support Inc., our subsidiary, by the Absorption-type Company
Split on January 1, 2016.
3. Subsidiaries Canon MJ IT Group Holdings Inc. and Canon IT Solutions Inc. were merged under Canon IT Solutions Inc. on April 1, 2016
4. On August 1, 2016, the Company spilt off and took over operations from the Education Business Divisions of subsidiaries Canon IT
Solutions Inc. and Canon System & Support Inc.

22

BUSINESS REPORT

2. Shares of the Company(1) Total Number of Authorized Shares

299,500,000 shares(2) Total Number of Issued Shares, Capital Stock, Number of Shareholders
As of the End of the Previous Term
Total number of issued shares (shares)
Capital stock (yen)Change during This Term

As of the End of This Term

151,079,972-

151,079,972

73,303,082,757-

73,303,082,757

13,731

Decrease of 561

13,170

Number of shareholders (persons)(3) Major Shareholders
Name of Shareholders

Number of Shares Held

Shareholding Ratio(thousands of shares)(%)

Canon Inc.

75,70858.4

Canon Marketing Japan Group Employee Stock Ownership Association

6,298

4.9

The Master Trust Bank of Japan, Ltd. (Trust account)

2,644

2.0

Japan Trustee Services Bank, Ltd. (Trust account)

2,125

1.6

STATE STREET BANK AND TRUST COMPANY 505001

1,507

1.2

CBNY-GOVERNMENT OF NORWAY

1,402

1.1

Canon Marketing Japan Group Business Partner Stock Ownership Association

1,213

0.9

Japan Trustee Services Bank, Ltd. (Trust account 9)

1,163

0.9

Mizuho Bank, Ltd.

1,001

0.8

THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT

969

0.7

Note : 1. The Company possesses 21,409,021 shares of its treasury shares (14.2% of the total number of issued shares).
2. The shareholding ratio is calculated by deducting the number of treasury shares from the total number of issued shares.

(4) Shareholding Ratio by Category
Financial
institutions

9.5%

Securities companies 0.5%

23Canon Marketing Japan Inc.

Other domestic companies

51.3%

Foreign companies,
etc.

11.6%

Individuals
and others

12.9%

Treasury shares

14.2%

Notice of Convocation

3. Directors and Audit & Supervisory Board Members
Business in Charge or Important Concurrent Posts

Haruo Murase

President & Representative Director
Executive President

Masahiro Sakata

Director Senior Vice President

Yutaka Usui

Director in charge of CSR Headquarters, General Administration &Human Resources Management Headquarters , Legal and Intellectual
Property Headquarters, Procurement Headquarters, and Logistics Center

Director Senior Vice President

Koichi Yagi

Company President of Imaging Systems Company

Director Senior Vice President

Akihisa KamimoriCompany President of ITS Company ,President & Representative Director of Canon IT Solutions Inc.

Director Senior Vice President

Yoshiyuki Matsusaka

Director in charge of Corporate Planning Headquarters andCommunications Headquarters

Director Senior Vice President

Masachika Adachi

Company President of Business Solution Company

Director Vice President

Shiro HamadaGroup Executive of Accounting Headquarters

Director

Norihisa Doi

Director

Akio Dobashi

Audit & Supervisory Board Member

Masahiro Shimizu

Audit & Supervisory Board Member

Fumio Ogaki

Audit & Supervisory Board Member

Shigeo Hasegawa

Audit & Supervisory Board Member

Kunihiko Tedo

Audit & Supervisory Board Member

Nobuyasu Kusumi

Business Report

Name

Chairman & Representative Director

Consolidated Financial
Statements

Position

Reference Documents For General
Meeting of Shareholders(1) Directors and Audit & Supervisory Board Members

Financial Statements

Outside Director of OSJB Holdings Corporation

Canon Marketing Japan Inc.

Reference

Audit Reports

Note : 1. Directors Mr. Shiro Hamada, Mr. Akio Dobashi, Audit & Supervisory Board Members Mr. Kunihiko Tedo, Mr. Nobuyasu Kusumi were newly elected at the 48th
Ordinary General Meeting of Shareholders held on March 29, 2016, and assumed their offices.
2. Directors Mr. Norihisa Doi and Mr. Akio Dobashi are Outside Directors.
3. Audit & Supervisory Board Members Mr. Shigeo Hasegawa, Mr. Kunihiko Tedo and Mr. Nobuyasu Kusumi are Outside Audit & Supervisory Board Members.
4. The Company has notified Directors Mr. Norihisa Doi and Mr. Akio Dobashi as independent directors and Audit & Supervisory Board Members Mr. Shigeo
Hasegawa and Mr. Nobuyasu Kusumi as independent auditors to Tokyo Stock Exchange, Inc. on which the Company is listed as provided under the
regulations of Tokyo Stock Exchange, Inc.
5. Audit & Supervisory Board Members Mr. Masahiro Shimizu and Mr. Fumio Ogaki have accounting experience in the Company for many years and have a
wealth of expertise in finance and accounting.
6. Audit & Supervisory Board Member Mr. Shigeo Hasegawa is qualified as a Certified Public Accountant and has a wealth of expertise in finance and accounting.
7. Audit & Supervisory Board Members Mr. Kunihiko Tedo has accounting experience in Canon Inc., our parent company, for many years and has a wealth ofexpertise in finance and accounting.
8. Audit & Supervisory Board Member Mr. Kuniyoshi Kitamura has retired at the conclusion of the 48th Ordinary General Meeting of Shareholders held on March
29, 2016.
9. The Company has entered into contracts, in accordance with the Articles of Incorporation, with the Outside Director and the Audit & Supervisory Board
Members to limit their liabilities to compensate damages under Paragraph 1, Article 423 of the Companies Act, to the limit of amount set forth in the
Paragraph 1, Article 425 of the Companies Act.

24

BUSINESS REPORT(2) Remuneration and Other Amounts to Directors and Audit & Supervisory Board Members
 Directors
11 persons
 Audit & Supervisory Board Members 7 persons

520 million yen
104 million yen

Note : 1. The total amount of remuneration paid to 2 Outside Directors and 5 Outside Audit & Supervisory Board Members is 78 million yen.
2. The above includes 1 Director and 2 Audit & Supervisory Board Members who have retired at the conclusion of the 48th Ordinary General Meeting of
Shareholders held on March 29, 2016.
3. Directors' remuneration and other amounts include directors' bonuses for this Term in the amount of 70 million yen.
4. Remuneration and other amounts received during this Term by Outside Directors and Outside Audit & Supervisory Board Members from the Parent Company
or its subsidiaries for their services as Director and Audit & Supervisory Board Members amounted to 9 million yen.

(3) Outside Director and Outside Audit & Supervisory Board Members
 Relation Between Important Organization of Concurrent Post and Canon Marketing Japan Inc.
Name

Concurrent Post

Organization of Concurrent Post

Relation with The Company

Akio Dobashi(Outside Director)

Outside Director

OSJB Holdings Corporation

No special relation

 Principal Activities

25

Name

Principal Activities

Norihisa Doi(Outside Director)

Attended 15 out of 16 of Board of Directors meetings held during this term, and provided input basedon his insight in information security when necessary.

Akio Dobashi(Outside Director)

Attended all 11 Board of Directors meetings since his appointment, out of a total of 16 meetings thisterm, and provided input based on his experience and knowledge in the field of corporate
management.

Shigeo Hasegawa(Outside Audit &Supervisory Board Member)

Attended all of 16 Board of Directors meetings and all of 16 Audit & Supervisory Board meetings held
during this term, and provided input based on his insight as a Certified Public Accountant whennecessary.

Kunihiko Tedo
(Outside Audit &Supervisory Board Member)

Attended all 11 Board of Directors meetings since his appointment, out of a total of 16 meetings thisterm, and similarly attended all 10 Audit & Supervisory Board Meetings since his appointment, out of a
total of 16 this term. Provided input based on his experience and knowledge in the field of accounting.

Nobuyasu Kusumi(Outside Audit &Supervisory Board Member)

Attended all 11 Board of Directors meetings since his appointment, out of a total of 16 meetings thisterm, and similarly attended all 10 Audit & Supervisory Board Meetings since his appointment, out of a
total of 16 this term. Provided input based on his experience and knowledge in the field of corporate
management.

Canon Marketing Japan Inc.

Notice of Convocation

4. Accounting Auditor

Reference Documents For General
Meeting of Shareholders(1) Name of Accounting Auditor
Ernst & Young ShinNihon LLC(2) Remuneration and Other Amounts to Accounting Auditor for This Term(i) R emuneration and other amounts payable by the Company for the services defined in Paragraph 1, Article 2 of theCertified Public Accountants Act

97 million yen(ii) T otal amount of cash and other financial benefits payable by the Company and its subsidiaries to the Accounting
Auditor

197 million yen

Business Report

AmountConsolidated Financial
Statements

Note : 1. In the audit agreement between the Company and the Accounting Auditor, remuneration amounts are determined on a lump-sum without breakdown into
a separate remuneration amount for auditing in accordance with the Corporation Law and in accordance with the Financial Instruments and Exchange Law.
Accordingly, the amounts shown in (i) above represent total amounts of remuneration and other amounts for both of these auditing services.
2. The Company pays remuneration to the Accounting Auditor for their financial due diligence services in addition to the services defined in Paragraph 1, Article
2 of the Certified Public Accountants Act.
3. Reason that the Audit & Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor:
The Audit & Supervisory Board has received necessary documents and reports from the Directors, related internal divisions, and the Accounting Auditor, in
addition to confirming the audit plan, status of the performed audit for the previous term, and that the estimated remuneration is appropriate for the relevantterm. As a result, the Audit & Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor, upon judging it to be a rational
level for maintaining and improving audit quality.

Financial Statements(3) Policy Regarding Decision to Either Dismiss or Not Reappoint Accounting Auditor
The Audit & Supervisory Board, by unanimous agreement, as needed, will dismiss the Accounting Auditor when confirmed that the
Accounting Auditor falls under any Item of Paragraph 1, Article 340 of the Companies Act.
In addition to the above, should anything occur to negatively impact the qualifications or independence of the Accounting Auditor, making it
unlikely that the Accounting Auditor will be able to properly perform an audit, the Audit & Supervisory Board will decide the contents of theitem to be proposed at a General Meeting of Shareholders regarding the dismissal or refusal of reappointment of the Accounting Auditor.

Audit Reports(4) Accounting Auditor Subject to Business Suspension Disposition during Past Two Years

Canon Marketing Japan Inc.

Reference(i) Subject of disposition
Ernst & Young ShinNihon LLC(ii) Contents of disposition
Suspension of accepting new engagements: three months(From January 1, 2016 to March 31, 2016)
Business improvement order (improvement of the operation control structure)(iii) Reason for disposition
In regard to the audit of financial statements for TOSHIBA CORPORATION in the fiscal year ended March 31, 2010, the fiscal year ended
March 31, 2012, and the fiscal year ended March 31, 2013, the above mentioned auditing firm’s certified public accountants, innegligence of due care, attested financial statements containing material false matters as those containing no material false matters.
The above mentioned auditing firm’s operation of the services was found to be grossly inappropriate.

26

BUSINESS REPORT

5. Policy Regarding Decision of Dividend from Surplus, etc.
The Company made its basis policy, with respect to profit distribution, in the Three-Year Management Plan 2015 to 2017 to pay thedividends based on a consolidated payout ratio of 30% taking into consideration comprehensively the medium-term profit plan,
investment plan, and cash flows to be generated. As to the dividend for this Term, the Company plans to pay an end-of-year dividend of 30
yen per share, totaling 50 yen per share (consolidated payout ratio of 35.7%) as a full-year dividend together with the interim dividend (20yen per share).
Note :	The amount and the number of shares described in this report, are rounded down to the nearest number of the units indicated. Profit attributable to owners ofparent per share are rounded off to two decimal places.

27

Canon Marketing Japan Inc.

Notice of Convocation

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
As of
As of
Dec. 31, 2016 Dec. 31, 2015
 Assets

As of
As of
Dec. 31, 2016 Dec. 31, 2015

76,78536,773

Notes and accounts payable

Notes and accounts receivable

124,475

125,906

Lease obligations

175

222

Securities

30,50062,800Accrued expenses

18,96822,118Merchandise and finished goods

Current liabilities

156,966

159,678

102,662

101,834

28,27028,327

Accrued income taxes

4,689

6,201

Work in process

834

791

Consumption taxes payable

4,296

5,131

Raw materials and supplies

875

887

Provision for bonuses

3,473

3,506

Deferred tax assets

4,214

5,280

Provision for directors' bonuses

128

130

Short-term loans receivable

90,04480,054

Provision for product warranties

461

529

Other

6,263

6,922

Provision for loss on order received

23

4

Allowance for doubtful receivables

(121)

(201)

Other

22,08619,999135,585

138,959

Noncurrent liabilities

59,841

49,385

Property, plant and equipment

96,701

99,310

Lease obligations

206

321

Buildings and structures, net

47,42546,926

Deferred tax liabilities

422

581

Machinery, equipment and vehicles, net

147

175

Deferred tax liabilities for land revaluation

Furniture and fixtures, net

3,963

4,357

Allowance for long-term continuous service rewards

Rental assets, net

10,574

11,511

Land

34,36435,939Lease assets, net

226

400

Intangible assets

6

26

961

943

Net defined benefit liabilities

53,56842,822

Other

4,675

4,689

216,808

209,064

Total liabilities

9,499

-

820

287,571275,247

Software

6,443

8,268

Capital stock

73,30373,303

Lease assets

53

76

Capital surplus

82,82082,820

Right of using facilities

317

317

Retained earnings

163,363

151,036

Treasury shares

Shareholders' equity

4

15(31,914)(31,911)

Investments and other assets

32,06430,150

Accumulated other comprehensive Income(7,099)1,760

Investments in securities

7,422

7,789

Valuation difference on available-for-sale securities

2,328

2,775

Long-term loans receivable

10

10

Deferred tax assets

17,66814,768

Lease deposits

4,824

5,274

Other

2,483

2,605

Non-controlling interests

Allowance for doubtful receivables

(344)

(298)

497,727

486,502

Other

Total assets

Deferred gains or losses hedges

(14)

0

Foreign currency translation adjustments

147

224

Remeasurements of defined benefit plants(9,560)(1,240)446

430

Total net assets

280,919

277,438

Total liabilities and net assets

497,727

486,502

Canon Marketing Japan Inc.

Audit Reports

 Net assets

6,819

Goodwill

ReferenceNoncurrent assets

Consolidated Financial
Statements

Cash and deposits

Financial Statements

347,542

Business Report Liabilities

362,141

Current assets

Reference Documents For General
Meeting of Shareholders(Millions of yen, amounts less than one million yen are rounded down)

28

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income

From January 1, 2016
to December 31, 2016

From January 1, 2015
to December 31, 2015

Net sales

629,313646,002

Cost of sales

403,306

412,897

Gross profit

226,007

233,104

Selling, general and administrative expenses

198,331206,457

Operating income

27,676

26,647

Non-operating income

1,405

1,770

Interest income

220

288

Dividend income

132

118

Insurance income

609

598

443

763

Non-operating expenses

363

376

Interest expenses

15

26

Foreign exchange losses

78

123

Other

270

226

Ordinary income

28,71728,040Extraordinary income

Other

1,473

559

Gain on sales of noncurrent assets

774

348

Gain on sales of investments in securities

661

82

Gain on sales of shares of subsidiaries and associates-

56

Insurance income on disaster

-

34

Other

36

38

1,287

1,102

Loss on sales and disposal of noncurrent assets

985

368

Impairment loss

131

2

Loss on disaster

27

14

Special extra retirement payments

5524Group reorganization expenses-

102

Extraordinary losses

137

89

Profit before income taxes

28,90327,497

Income taxes-current

8,789

10,301

Income taxes-deferred

1,918

1,468

Profit18,195

15,72833

57

18,161

15,670

Other

Profit attributable to non-controlling interests
Profit attributable to owners of parent

29(Millions of yen, amounts less than one million yen are rounded down)

Canon Marketing Japan Inc.

Notice of Convocation

FINANCIAL STATEMENTS
Balance Sheets

Claims provable in bankruptcy, claims provable in rehabilitation and other

Long-term prepaid expenses
Deferred tax assets
Lease deposits
Other
Allowance for doubtful receivables
Total assets

177,829
2,163
97,59838,66095
2,392
16,362
3,490
2,008
9,537
3,333
1,672
70
444
34,03684
28,987557
4,406
211,866

175,649
1,937
96,17734,080133
2,613
19,058
5,152
2,270
8,615
3,311
1,732
64
502
35,505180
30,393552
4,378
211,155

270,41373,30385,20485,1985
143,824
2,853
140,970
6
81,70059,264(31,918)
2,003
2,018
(14)
272,417484,283

262,652
73,30385,19985,1980
136,065
2,853
133,212
9
81,70051,502(31,915)
2,328
2,327
0
264,980
476,136

Canon Marketing Japan Inc.

Business Report Liabilities
Current liabilities
Electronically recorded obligations - operating
Accounts payable
Short-term loans payable
Lease obligations
Accounts payable - otherAccrued expenses
Accrued Income taxes
Consumption taxes payable
Advances received
Deposits received
Provision for bonuses
Provision for directors' bonuses
Provision for product warranties
Noncurrent liabilities
Lease obligations
Provision for retirement benefits
Allowance for long-term continuous service rewards
Other
Total liabilities Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for advanced depreciation of non-current assets
General reserve
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses hedges
Total net assets
Total liabilities and net assets

Consolidated Financial
Statements

305,725
19,557
3,273
8,112
95,96862,80023,315
77
597
979
561
3,908
80,995
5,027
0
740
(190)
170,411
69,34229,019
710
164
0
2,900
11,457
24,829
259
7,160
7,026
23
110
93,9096,895
71,557233
405
10,831
2,895
1,341
(251)
476,136

Financial Statements

319,556
58,0692,877
8,341
96,01730,50022,834
72
601
1,526
527
2,871
90,550
4,195
3
680
(111)
164,726
67,18328,096
689
145
2,735
10,54324,829
144
5,211
5,085
15
110
92,331
6,646
71,010215
385
10,226
2,696
1,389
(238)
484,283

Audit Reports

 Assets
Current assets
Cash and deposits
Notes receivable
Electronically recorded monetary claims - operating
Accounts receivable
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payment - trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Accounts receivable - other
Forward exchange contracts
Other
Allowance for doubtful receivables
Noncurrent assets
Property, plant and equipment
Buildings
Structures
Machinery
VehiclesFurniture and fixtures
Rental assets
Land
Lease assets
Intangible assets
SoftwareLease assets
Right of using facilities
Investments and other assets
Investments in securities
Shares of subsidiaries and associates

As of
As of
Dec. 31, 2016 Dec. 31, 2015

Reference

As of
As of
Dec. 31, 2016 Dec. 31, 2015

Reference Documents For General
Meeting of Shareholders(Millions of yen, amounts less than one million yen are rounded down)

30

FINANCIAL STATEMENTS

Statements of Income(Millions of yen, amounts less than one million yen are rounded down)

From January 1, 2016
to December 31, 2016
Net sales

479,457

495,699

Cost of sales

340,212347,218

Gross profit

139,245

148,481

Selling, general and administrative expenses

123,062

132,604

Operating income

16,183

15,876

Non-operating income

4,507

4,480

Interest income

217

280

Dividend income

3,511

2,556

Insurance income

561

586

Rent income of subsidiaries and affiliates
Other

3

818

214

237

315

260

Interest expenses

54

84

Share related expenses

58

58

Foreign exchange losses

49

13

Non-operating expenses

Other
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investments in securities

153

103

20,37520,096

639

5

2

5

637

0

1,089

382

Loss on sales and disposal of noncurrent assets

376

181

Loss on valuation of shares of subsidiaries and associates

612

189

Loss on sales of investment securities

-

11

Other

100

-

Income before income taxes

19,925

19,719

Income taxes-current

4,493

6,493

Extraordinary losses

31

From January 1, 2015
to December 31, 2015

Income taxes-deferred

1,838

1,375

Profit13,593

11,849Canon Marketing Japan Inc.

Notice of Convocation

AUDIT REPORTS

The Board of Directors
Canon Marketing Japan Inc.

Report of Independent Auditors

February 8, 2017

Ernst & Young ShinNihon LLC
Sayaka Shimura

Certified Public Accountant
Designated and Engagement Partner
Kiyoto Tanaka
Certified Public Accountant
Designated and Engagement Partner
Keiichi Wakimoto Certified Public Accountant
Designated and Engagement Partner

Business Report(Translation)

Reference Documents For General
Meeting of Shareholders

Accounting Audit Report of Accounting Auditor on Consolidated Financial Statements

Consolidated Financial
Statements

Pursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprisethe consolidated balance sheet, the consolidated statement of income, the consolidated statements of changes in net assets and the notes
to consolidated financial statements of Canon Marketing Japan Inc. (the “Company”) applicable to the fiscal year from January 1, 2016 throughDecember 31, 2016.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the accounting
principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable
the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or
error.

Audit Reports

Financial Statements

Auditors’ Responsibility
Our responsibility is to express an opinion from an independent perspective on the consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures are selected and applied depending on the auditors’judgment, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors do not consider internal control
for the purpose of expressing an opinion on its effectiveness, but consider internal control relevant to the entity’s preparation and fair presentationof the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used, the method of their application, and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Reference

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results ofoperations of the Canon Marketing Japan Group, which consisted of the Company and consolidated subsidiaries, applicable to the fiscal year
ended December 31, 2016 under the accounting principles generally accepted in Japan in accordance with the Company Accounting Regulations.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act.

Canon Marketing Japan Inc.

32

AUDIT REPORTS

Accounting Audit Report of Accounting Auditor(Translation)
The Board of Directors
Canon Marketing Japan Inc.

Report of Independent Auditors

February 8, 2017

Ernst & Young ShinNihon LLC
Sayaka Shimura

Certified Public Accountant
Designated and Engagement Partner
Kiyoto Tanaka
Certified Public Accountant
Designated and Engagement Partner
Keiichi Wakimoto Certified Public Accountant
Designated and Engagement Partner

Pursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying financial statements, which comprise thebalance sheet, the statement of income, the statement of changes in net assets, the notes to non-consolidated financial statements, and therelated supplementary schedules of Canon Marketing Japan Inc. (the “Company”) applicable to the 49th fiscal year from January 1, 2016 throughDecember 31, 2016.
Management’s Responsibility for the Financial Statements and the Related Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and the related supplementary schedules inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management
determines is necessary to enable the preparation and fair presentation of the financial statements and the related supplementary schedules thatare free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion from an independent perspective on the financial statements and the related supplementary schedules
based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements and the related supplementary schedules arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the related
supplementary schedules. The procedures are selected and applied depending on the auditors’ judgment, including the assessment of the risks ofmaterial misstatement of the financial statements and the related supplementary schedules, whether due to fraud or error. In making those risk
assessments, the auditors do not consider internal control for the purpose of expressing an opinion on its effectiveness, but consider internal
control relevant to the entity’s preparation and fair presentation of the financial statements and the related supplementary schedules in order todesign audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies
used, the method of their application, and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements and the related supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the financial statements and the related supplementary schedules referred to above present fairly, in all material respects, thefinancial position and results of operations of Canon Marketing Japan Inc. applicable to the fiscal year ended December 31, 2016 in conformity withaccounting principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act.

33

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

Audit Report of Audit & Supervisory Board
Audit Report
Regarding the performance of duties by the Directors for the 49th business term from January 1, 2016, to December 31, 2016, we have prepared this Audit Report upon deliberation
based on the audit reports prepared by each Audit & Supervisory Board Member and hereby report as follows:

Consolidated Financial
Statements

Business Report

1. Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory Board and Details of Such Audit(1) We established auditing policies, allocation of duties and other relevant matters, and received reports from each Audit & Supervisory Board Member regarding their executionof audits and results thereof, as well as reports from the Directors, other relevant personnel, and the Accounting Auditor regarding performance of their duties, and sought
explanations as necessary.
(2) Each Audit & Supervisory Board Member complied with the auditing standards of Audit & Supervisory Board Members established by the Audit & Supervisory Board, followed
the auditing policies, allocation of duties, and other relevant matters, communicated with such as the Directors, the internal auditing and other employees, and made efforts toestablish the environment for collecting information and auditing, and audited by methods as follows:(i) Participated in the meetings of the Board of Directors and other important meetings, received reports from Directors and employees and others regarding performance of
their duties, sought explanations as necessary, examined important authorized documents and associated information, and studied the operations and status of assets at theheadquarters and principal offices. In addition, with respect to subsidiaries, communicated and exchanged information with Directors and Audit & Supervisory Board Membersof subsidiaries, and received business reports from subsidiaries as necessary.
(ii) Periodically received reports from Directors, employees and others, requested explanations as necessary, and expressed opinions, regarding the resolution of the Board of
Directors on the establishment of following systems (Internal Control System) and the status of operation of the organized system based on such resolution;i) the system for ensuring that the performance of duties by the Directors conforms to the applicable laws and regulations and Articles of Incorporation, andii) the system stipulated in Item 1 and Item 3, Article 100, of the Enforcement Regulations of the Corporation Law, which are necessary for ensuring the properness ofoperations of the enterprises consisting of the Company and its subsidiaries.
(iii) Examined the contents of the matters considered and the assessment and reason described in this Business Report under (a) and (b) of Item 5, Article 118 of the Enforcement
Regulations of the Companies Act taking into account on the status of deliberations of the Board of Directors, etc.
(iv) Monitored and verified whether the Accounting Auditor maintained their independence and implemented appropriate audits, and we received reports from the Accounting
Auditor regarding the performance of their duties and sought explanations as necessary. In addition, we received notice from the Accounting Auditor that “System for ensuringthat duties are performed properly” (matters set forth in each item of Article 131 of the Company Accounting Regulations) is organized in accordance with the “Quality
Management Standards Regarding Audits” (Business Accounting Council, October 28, 2005) and other relevant standards, and sought explanations as necessary.

Financial Statements

Based on the above methods, we examined the business report and the accompanying detailed statements, the financial statements (balance sheet, statement of income, statementof changes in net assets, and notes to non-consolidated financial statements) and the accompanying detailed statements as well as the consolidated financial statements (consolidatedbalance sheet, consolidated statement of income, consolidated statements of changes in net assets, and notes to consolidated financial statements) for this business term.

Audit & Supervisory Board, Canon Marketing Japan Inc.
Audit & Supervisory Board Member
Masahiro Shimizu
Audit & Supervisory Board Member
Fumio Ogaki
Audit & Supervisory Board Member
Shigeo Hasegawa(Outside Audit & Supervisory Board Member)
Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)

Reference

February 9, 2017

Audit Reports

2. Audit Results(1) Results of Audit of Business Report and Other Relevant Documents(i) We confirm that the business report and the accompanying detailed statements fairly represent the Company’s conditions in accordance with the related laws and regulations
and Articles of Incorporation.
(ii) We have found no significant evidence of wrongful act or violation of related laws and regulations, nor the Articles of Incorporation with regard to the performance of duties by
the Directors.
(iii) We confirm that the content of the resolution of the Board of Directors regarding the Internal Control System is proper. In addition, we have found no matters on which toremark in regard to the performance of duties by the Directors regarding the Internal Control System.
(iv) With respect to the transactions with Parent Company, etc. which are described in this Business Report, we have found no matters on which to remark in regard to the mattersconsidered and the Board of Directors’ assessment and reason as to the harm to the Company’s profit.
(2) Results of Audit of financial statements and the accompanying detailed statements
We confirm that the methods and results of the audit employed by the Accounting Auditor, Ernst Young ShinNihon LLC, are proper.
(3) Results of Audit of consolidated financial statements
We confirm that the methods and results of the audit employed by the Accounting Auditor, Ernst Young ShinNihon LLC, are proper.

Kunihiko Tedo
Nobuyasu Kusumi

Canon Marketing Japan Inc.

34

Topics

Strengthening Network Camera Solutions
We are working to strengthen solutions in areas such as software, in an effort toexpand our network camera business. As well as launching software based on
Canon’s unique image analysis technology capable of counting the number ofpeople in a given area within an image, we have also concluded sales contracts
related to image control software and systems with Cannon Group company
Milestone Systems A/S and NEC Corporation and have released these products.
At the same time, we have been actively focusing on strengthening solutions
through collaborative ventures, including commencing sales of cloud-related
services in partnership with CREW SYSTEMS, Inc. We will continue to expand our
network camera business through measures such as these in the future.

Counting the number of people in a given area

Developing a tablet version of Deposit Asset Sales Navi in accordance with the Financial Instruments and Exchange Act
We have developed a tablet version of Deposit Asset Sales Navi in accordance with the Financial Instruments and Exchange Act, and havestarted offering the system to local financial institutions. Since the Financial Instruments and Exchange Act came into effect, financial institutions
have had to address issues such as establishing system for compliance, providing customers with increasingly complex explanations based on
legislation and industry regulations, and improving the efficiency of bureaucratic paperwork and procedures. This system enables users to strikea balance between ensuring compliance and increasing efficiency, by managing sales processes for financial products across the board. As theGroup, we remain committed to resolving issues facing local financial institutions in the future, by offering them solutions such as this system.

Launching EOS Gakuen Online photography classes
Building on the expertise we have developed through our EOS Gakuen
photography classes, in March we launched EOS Gakuen Online. This means thatanyone can enjoy classes whenever they like, providing they have an Internet
connection. We have a range of popular classes to suit whatever goal people havein mind, and we have been receiving an encouraging response. As well as coursesthat combine classes available online with practical training in photography,
we also run online skills courses for those seeking to master the basics ofphotography, online instructional and genre-specific courses for people to learn
about themes in photography and techniques for different genres, and online
feedback courses where users can submit their work and get video feedback.

35

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

Launching remote image viewing infrastructure services to improve efficiency for medical checkups

Business Report

In November we started providing remote image viewing infrastructure services for medical checkups, using our Medical Image Place cloud-related
medical imaging service (launched in 2014) as a platform. The service enables medical images taken by the institution carrying out checkups to beviewed by specialists, so that their findings can then be fed back into the institution’s main system. Whereas medical institutions have introduced awide range of testing equipment in recent years, reflecting growing demand for preventive medicine, there is still a shortage of doctors capable ofproviding diagnoses based on the resulting images. This service will help to improve both productivity and efficiency as part of medical checkups.

Entering the industrial drone market through investment in Prodrone Co., Ltd.

Financial Statements

Consolidated Financial
Statements

In September, we invested in Prodrone Co., Ltd., a leading Japanese commercial
use drone manufacturer with extensive technical expertise in areas such as bodydesign and software development. We also signed a sales contract with Prodrone,
marking our entry into the drone market. As the company’s main distributor forcommercial use drones, we intend to equip drones with Canon imaging devices,
so that we can develop image analysis solutions and other related services using
the resulting high-resolution image data.

Canon project certified as collaborative initiative by the Japan Committee for the United Nations Decade on Biodiversity

Reference

Audit Reports“Furusato Project – Linking our Dream to the Future,” a groupwide project toraise awareness and preserve biodiversity, has been certified as a collaborative
initiative for promotion by the Japan Committee for the United Nations Decadeon Biodiversity*. The aim of the project is to provide support in such a way thatmakes the most of the Canon Group’s key characteristics. In addition to subsidies,that includes support to improve expertise and organizational capabilities inrelation to biodiversity, running photography classes, and lending equipment
such as cameras and printers. Certification serves as recognition of the strengthsof this project, and will spur us on to expand biodiversity preservation activities
even further in the future.
* Committee set up in September 2011 with the aim of helping to achieve the “Aichi targets,” new global targets for the preservation of biodiversity adopted at the 10th Conference of the Parties to the
UN Convention on Biological Diversity (COP10)

Canon Marketing Japan Inc.

36

List of Canon MJ Group Companies(As of January 1, 2017)

Company NameLines of Business

Canon Marketing Japan Inc.
Canon System & Support Inc.

Consultation of a solution, sale, support and maintenance service, mainly for Canon products

Canon Production Printing Systems Inc.

Sales of production printing equipment and consumables, maintenance service, development andprovision of workflow systems, etc. and printing service, etc.

Canon BizAttenda Inc.

Contact center service, backoffice BPO service, document BPO service, business support BPO service andtemporary staffing

A&A Co., Ltd.

Domestic sales including Japanese localization of "Vectorworks" 3D CAD software, and planning,development and sales of related softwares

Canon IT Solutions Inc.

SI and consulting, IT service and development and sale of various softwares

Canon Software Inc.

Development of embedded software and quality inspection service

SuperStream Inc.

Planning, development and sales of Super Stream-NX, a business platform solution (accounting, humanresources/payroll)

Qualysite Technologies Inc.

Development of system specialized in Java and operation, maintenance and ancillary services of datacenters

Edifist Learning Inc.

Consulting of human resource development, various trainings and ancillary services

Canon Software America, Inc.

Development of various business application softwares and document solution for the Group Companies

Canon Information Systems (Shanghai) Inc.

SI and consulting for the Group companies and other Japanese companies and development and sales ofsoftware products for Canon products

Canon IT Solutions (Thailand) Co., Ltd.

Supervision of Group Companies in Thailand and Vietnam

Material Automation (Thailand) Co., Ltd.

Proposition, sales and services of IT hardware and software

Canon Customer Support Inc.

Contact center operation for centered on Canon consumer products, services for consumer products andsupport of photo business

Canon Lifecare Solutions Inc.

Sales of medical equipment, healthcare related equipment and consumables and medical image systems

Elquest Corporation

Design, manufacturing and sales of dispensing equipment, infection prevention equipment, medical
equipment and health care equipment

Canon ITS Medical Inc.

Provision of IT solution, development of systems and construction of network and hardware in medical
health care field

AZE, Ltd.

Development, manufacture and sales of 3D medical image analysis systems, etc.

Canon Business Support Inc.

Facility management, real estate service and office service of the Group companies

 Business Solutions  IT Solutions  Imaging Systems  Industrial/Medical  Shared service
Notes: 1. There are 24 consolidated subsidiaries (including five companies such as domain name management companies.)
2. Sales figures for major subsidiaries (2016) were as follows: Canon System & Support Inc. 123.8 billion yen, Canon Production Printing Systems Inc. 14.7 billion yen, Canon IT Solutions Inc. 75.6
billion yen, Canon Lifecare Solutions Inc. 13.8 billion yen
3. Shared service:echanism designed to improve services and reduce costs by consolidating overlapping operations between multiple

37

Canon Marketing Japan Inc.

Notice of Convocation

WebsiteEmail newsletter

We provide a range of information, as well as content such as reports
on company presentations and other events, via our Investor Relations
website, in an effort to give shareholders and investors a better
understanding of Canon MJ.
Our Investor Relations website was selected to receive a 2016 Internet IR
Commendation Award, as part of the 2016 Internet IR Awards presented
by Daiwa Investor Relations Co., Ltd. We are committed to maintaining astraight-forward IR site and enhancing contents even further in the future,so as to give investors an even better understanding of Canon MJ.

We send out information on a weekly basis, including details of events
such as exhibitions and free seminars, as well as IR information. To receive
emails, please register on the frontpage of our Investor Relations website.

Reference Documents For General
Meeting of Shareholders

Details of our Communication Activities

Presentations and IR events

Consolidated Financial
Statements

Business Report

In August, we exhibited at the Nikkei IR Investment Fair 2016, an event
aimed at individual investors. We also organized a company presentation
at a branch of various companies.
We hope to create a lot of more
opportunities like this in the
future, and will post details ofscheduled events on the website
as soon as they are available.

h ttp ://cweb.canon.jp/ir /General Stock Information

December 31 of each year Record date for dividends End-of-year dividend: December 31 of each year
Interim dividend: June 30 of each year Manager of the registerof shareholders

2-1, Yaesu 1-chome, Chuo-ku, Tokyo
Mizuho Trust & Banking Co., Ltd.

 Business handling place

Stock Transfer Agency Department, Head Office,Mizuho Trust & Banking Co., Ltd.

 Account management
institution for the special
account (tokubetsu koza)

Mizuho Trust & Banking Co., Ltd. /Mitsubishi UFJ Trust and Banking Corporation Number of sharesconstituting one unit

100 shares Method of public noticeElectronic means (http://cweb.canon.jp/co-profile/ir/
index.html)
However, if the Company is unable to give anelectronic public notice due to an accident or any
other unavoidable reason, the notice shall be givenin the Nikkei.

 Stock exchange listings

Tokyo Stock Exchange (First Section)

 Securities code

8060

Financial Statements

 Record date for above

Inquiries regarding share-related procedures If your shares are managed by a securities firm, please contact

the relevant securities firm with any inquiries.
* If your inquiry concerns payment of unpaid dividends or provision of apayment statement however, please contact the Manager of the registerof shareholders (Mizuho Trust & Banking Co., Ltd.: 0120-288-324 (tollfree)).

Audit Reports

From January 1 to December 31 of each year Ordinary General Meeting March of each yearof Shareholders

 If your shares are not managed by a securities firm, pleasecontact the following division with any inquiries
Stock Transfer Agency Department of Mizuho Trust & Banking
Co., Ltd.
0120-288-324 (toll-free)* If you held shares in Showa Information Systems Co., Ltd. (now Canon
Production Printing Systems, Inc.) in a special account (tokubetsu koza) as
of April 30, 2012, the day before the effective date of the share exchange
between Canon MJ and Showa Information Systems, please contact
the Corporate Agency Division of Mitsubishi UFJ Trust and Banking
Corporation (0120-232-711 (toll-free)) with any inquiries.

Canon Marketing Japan Inc.

Reference Business term

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