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.

NOTICE OF CONVOCATION OF THE 53RD ORDINARY
GENERAL MEETING OF SHAREHOLDERSDATE AND TIME:

March 26 (Friday), 2021 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, Tokyo

Request for Shareholders
In order to prevent the spread of COVID‐19 at the General Meetingof Shareholders, you are urged to exercise your voting rights inwriting or via the Internet in advance if possible and to refrain fromcoming to the meeting in person, regardless of your health status.
<Deadline of Exercise of Voting Rights in Writing or Via the Internet>
5:30 p.m. on March 25 (Thursday), 2021(Japan time)
Securities Code: 8060

To Our Shareholders
We would like to extend our sincerest gratitude to all of our shareholders for their continued support.
Canon Marketing Japan Inc. is pleased to present this notice to convene the 53rd Ordinary General Meeting of
Shareholders.
First of all, I would like to offer my condolences to thepeople who have lost their lives due to the newcoronavirus (COVID‐19), as well as my sympathy to those
who have been affected and their families and otherconcerned parties.
During the fiscal year under review (January 1, 2020 to
December 31, 2020), the Group responded to new
demand by proactively providing inkjet printers andrelated IT products and services in line with the
expansion of home learning and telework as a result of
the impact of the COVID‐19 pandemic. Despite ourefforts to respond to new demand in this manner, sales
declined due to a significant contraction in the markets
for mainstay business equipment and digitalinterchangeable lens cameras. We were able to control
the decline in operating income thanks to steadyprogress in reducing SG&A expenses through thetransformation to a more robust structure, which wehave been working on for some time. As a result, we will
be proposing at the 53rd Ordinary General Meeting of
Shareholders that the year‐end dividend be 40 yen per
share, instead of the 20 yen per share previously forecast
at the time of release of the half‐year financial results.
Together with the interim dividends (20 yen per share),this will bring the full‐year dividends to 60 yen per share(unchanged from the previous fiscal year).
This year, while we expect the market environment toremain challenging for Canon’s major products such as
cameras and printers, we will strive to maximize bothsales and unit sales with a priority on earning profit. In
the IT solutions business, which we have positioned as a
growth business, we will expand the provision ofsolutions using security products and network cameras
in order to meet various growing demands such as
teleworking and remote monitoring due to the spread of
COVID‐19. In addition, we completed the construction of
a second data center building in October 2020 to meetthe growing demand for cloud services. We will aim to improve customer satisfaction and expand our business byutilizing the data center to provide total services, including maintenance and operation of systems developed by theGroup.
We sincerely appreciate the continued support of our valued shareholders.
March 2021

Masahiro Sakata
President & Representative Director

Cover Photo: The Old City of Bern in Switzerland from the 2021 Canon Marketing Japan Calendar “World Heritage Journey Sekaiisan wo Tazunete” by Kazuyoshi Nomachi

1
Canon Marketing Japan Inc.

(Figures are rounded to the nearest unit)

Results Highlights

Fiscal year
(Billions of yen)

Net sales(Billions of yen)

Operating income

Comparison withprevious period

Comparison withprevious period

3.5%

12.2%
629.3

632.2

621.6

621.1

2016

2017

2018

2019

27.7

30.4

28.9

2017

2018

32.4

31.3

2019

2020

545.1

2020

2016

(Billions of yen)

Ordinary income(Billions of yen)

Profit attributable to owners of parent

Comparison withprevious period

3.8%
28.7

31.5

30.5

33.9

1.1%

35.2
18.2

2016

2017

2018

2019

Profit attributable to owners of parent per share

140

159

161

172

2020

2016

20.7

20.8

22.3

22.0

2017

2018

2019

2020

(Yen)

170

Please see our website for more detailed businessresults.
canon.jp/8060e-ir

2016

2017

2018

2019

Comparison withprevious period

2020

2Canon Marketing Japan Inc.

NOTICE OF CONVOCATION
Securities Code: 8060
March 5, 2021

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

Masahiro Sakata
President & Representative Director

NOTICE OF CONVOCATION OF THE 53RD ORDINARY
GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 53rd Ordinary General Meeting of Shareholders of Canon Marketing Japan Inc.
(the “Company”) will be held as described below.
In order to prevent the spread of COVID-19 at the General Meeting of Shareholders, you are urged to exercise
your voting rights in writing or via the Internet in advance if possible and to refrain from coming to the meetingin person, regardless of your health status.
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 25 (Thursday), 2021(Japan time).
March 26 (Friday), 2021 at 10:00 a.m. (Japan time)
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 andConsolidated Financial Statements for the 53rd Fiscal Year(from January 1, 2020 to December 31, 2020), and reports on
the Auditing Results of Accounting Auditor and Audit &Supervisory Board regarding the Consolidated Financial
Statements.
2. Reports on the content of the Non-Consolidated Financial
Statements for the 53rd Fiscal Year (from January 1, 2020 to
December 31, 2020).
Matters to be Resolved upon:
Item No. 1 Dividends from Surplus
Item No. 2 Election of Six Directors
Item No. 3 Payment of Bonuses to Directors
Item No. 4 Revision of Performance-based
Stock Compensation Plan
1. DATE AND TIME:
2. PLACE:

3
Canon Marketing Japan Inc.



Upon attending the Meeting, please present the enclosed Voting Form to the receptionist at the placeof the Meeting.



About the procedures for the exercise of voting rights in writing or by the Internet, etc., please see thefollowing pages.



The following items are posted on the Company’s website (canon.jp/8060-ir) in accordance with therelated laws and regulations and Article 14 of the Company’s Articles of Incorporation and are therefore
not included in the documents attached to this Notice:(1) Systems for Ensuring Appropriateness of Business Operations and Outline of Implementation
Activities to be described in the Business Report(2) Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements(3) Non-Consolidated 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 andNon-Consolidated Financial Statements, which Audit & Supervisory Board Members audited to prepare
their audit reports, and item (2) above are part of Consolidated Financial Statements and item (3) above
are part of Non-Consolidated Financial Statements, which Accounting Auditor audited to prepare its
audit reports.



Any revisions to the Reference Documents for General Meeting of Shareholders, Business Report,
Consolidated Financial Statements and Non-Consolidated Financial Statements will be posted on thecompany’s website on the Internet (canon.jp/8060-ir).

4
Canon Marketing Japan Inc.

<Notice on Measures in Response to COVID-19>
In order to prevent the spread of COVID-19, we would like to ask for your understanding and cooperation ingiving top priority to the health and safety of all shareholders, and refraining from coming to the meeting inperson as well as implementing the following measures at the meeting.


Due to the wide space that will be provided between seats for shareholders, the number of seatsavailable will be significantly decreased compared to previous years. For this reason, there is apossibility that you may be unable to take a seat even if you come to the venue on the day of themeeting.

On the day of this General Meeting of Shareholders, the time for the proceedings will be shortened,
and the explanation on the matters to be reported and the agenda items will be shortened accordingly.
We appreciate your understanding.



All Directors of the Company and the administrative staff at the meeting will wear masks.



We ask for your cooperation in wearing a mask and using alcohol disinfectant on the day of the meeting
to prevent the spread of infection. We will measure the temperature of shareholders before thereception on the day of the meeting, and if a shareholder is determined to be in poor health including
instances when a shareholder is feverish, we may take necessary measures to prevent the spread of
infection, such as restricting admission to the meeting room.

The above measures are subject to change depending on the situation of the spread of the COVID-19 up to
the day of this General Meeting of Shareholders and the announcements made by the government andother organizations. Please visit our website for any changes to be made to the General Meeting of
Shareholders.

5
Canon Marketing Japan Inc.

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 thefollowing Reference Documents for the General Meeting of Shareholders (pages 8-20), please exercise your voting rights.

The Voting rights can be exercised in one of the following three ways.
Exercise of Voting Rights by Attending the Meeting
DATE AND TIME:
PLACE:March 26 (Friday), 2021 at 10:00 a.m. (Japan time)
Headquarters of the Company
CANON HALL S, 3rd floor of CANON S TOWER
16-6, Konan 2-chome, Minato-ku, Tokyo

Please bring and present the enclosed Voting Form to the receptionist at the placeof the Meeting.

Exercise of Voting Rights in Writing (Via Postal Mail)
Deadline for exercising
voting rights:

The Voting Form must reach us no later than
5:30 p.m. on March 25 (Thursday), 2021 (Japan time)

Please indicate your for/against for each of the propositions on the enclosed Voting
Form and return it by postal mail.

Exercise of Voting Rights by Electromagnetic Means (Via the Internet)
Deadline for exercising
voting rights:

The exercise of voting rights must be made no later than
5:30 p.m. on March 25 (Thursday), 2021 (Japan time)

Please enter your for/against for each of the propositions on the website for the
exercise of voting rights (https://soukai.mizuho-tb.co.jp/) and send it.
* If voting rights are exercised in duplicate via the Internet and via postal mail, votes made via the Internet will be deemed to be valid.
* If you exercise your voting rights more than once via the Internet, we will treat the last exercise of your voting rights as effective.
* Please note that you may not be able to access the website for the exercise of voting rights depending on your Internet operating environment, your Internet service or
the model of the device you use.
* Any internet connection charges, communication charges or other fees incurred when you access the website for the exercise of voting rights shall be borne by you.

6
Canon Marketing Japan Inc.

Guidance Notes on the Exercise of Voting Rights via the Internet, etc.
How to scan the QR code using your smartphone“Smart voting”
https://soukai.mizuho-tb.co.jp/

You can log-in to the voting website without having
to enter your voting code or password.

Access the website for the exercise of voting rights.

Scan the QR code printed on the bottom-right of thevoting form.

Website for the
exercise of voting
rightsClick on the“Next” button.

1

Enter your voting code shown on your voting form.

* “QR code” is a registered trademark of DENSO WAVE INCORPORATED.

Indicate your approval or disapproval of theresolutions by following the directions on the screen.

Enter voting code.

Click on the “Next”
button.

2Enter your password shown on your voting form.
Enter password.

Click on the “Login” button.

You can exercise your voting rights ONLY ONCE by “smart voting.” If
you wish to change your vote after exercising your voting rights by“smart voting,”please accessthe PC version of website for the exercise of
voting rights, login by entering your voting code and password shownon the voting form and vote again.
* Scanning the QR code again can take you to the PC version website for the exercise of
voting rights.

If you have any questions about use of the voting
website or “smart voting,” 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 holiday

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

7
Canon Marketing Japan Inc.

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Item No. 1: Dividends from Surplus
We have comprehensively considered the business results, etc. for this Fiscal Year, and propose a year-end
dividends as described below.
Thus, the full-year dividends will be 60.00 yen per share, which includes interim dividends of 20.00 yen per
share. Although it is provided in the Articles of Incorporation that the dividends from surplus, etc. may be
decided by a resolution of the board of directors, we have made it a matter to be resolved at this Meeting tohave an opportunity to hear the shareholders’ views directly.
1

Type of dividend:

Cash

2

Matters concerning distribution ofdividend and its total amount:3

Effective date of the dividend from surplus:

40.00 yen per common share of the Company
Total amount of dividend 5,186,686,000 yen
March 29, 2021

<REFERENCE> Changes in dividends (yen)
70
60
50
35

35

25

25

50th
Business term

51st
Business term

40

40

30

25

30

30

25

20
10

14

12

10
10

10

12

44th
Business term

45th
Business term

46th
Business term

15

20

20

48th
Business term

49th
Business term

30
20

0
47th
Business term

Full-year dividends

Year-end dividends

8
Canon Marketing Japan Inc.

52nd
Business Term

53rd
Business Term
(Plan)

Item No. 2: Election of Six Directors
The term of offices of all of the six Directors will expire at the end of this Meeting. Accordingly, we would liketo elect six Directors.
The candidates for the position of the Directors are as follows:
CandidateNo.

1

Reappointment

2

Reappointment

3

Reappointment

4

New
Appointment

5

Reappointment

Attendance at
Member of Nomination
Board of Directors’
and Remuneration
Meetings
Advisory Committee

Masachika Director & Senior Vice President
Adachi Director of Enterprise Business Unit100%
(18/18)

Director & Vice President
Director in charge of Group Finance& Accounting and Group Auditing100%(18/18)

Shiro
HamadaDirector & Vice President
Hatsumi Director in charge of Group Planning,
Hirukawa Group Service & Support and Group
Communication
Vice Presidentof Group General
2Minoru Director in charge& Human Resources
Mizoguchi Administration
Management, Group Procurement
and Group Logistics
OutsideIndependent

6

Present Position and Areas of Responsibility
at the Company

Name

〇

100%
(13/13)-

Akio
Dobashi

Outside Director

100%(18/18)〇

YoshioOsawa

Outside Director

100%(18/18)〇OutsideReappointment
Independent* In the above list for the candidates for Directors who currently serve as members of the Nomination and Remuneration Committee, the “〇” symbol indicates a member.
The organization of the Nomination and Remuneration Committee is presented on page 14.

<REFERENCE>
Changes in the number of members of the Board of Directors
Directors

10

10

Independent Outside Directors included

Independence of the Board of
Directors after the election

7
6

6

6

Two Independent
Outside Directors
out of six Directors

2

2

2

2

2

2

2016

2017

2018

2019

2020

2021
(Candidates)

9
Canon Marketing Japan Inc.

Brief personal record, position, business in charge and important concurrent posts
Candidate
No.

As of
Apr. 1982: Entered the Company
Jul. 2009: Group Executive of MA Business Sales Headquarters, Business Solutions Company
Mar. 2013: Vice President
Mar. 2015: Director & Senior Vice President
Apr. 2015: Company President of Business Solutions Company
Jan. 2018: Director of Enterprise Business Unit (present)
Apr. 2019: Director & Senior Vice President (present)

1
Masachika Adachi(March 30, 1960)
16,422 shares

Reason for Nomination as Director
Mr. Adachi led various business fields for many years. He has held the posts of Director andExecutive Officer, and has considerable experience and knowledge of management for theCompany. Thus, he has again been selected as a candidate for a Director.

Brief personal record, position, business in charge and important concurrent posts
Candidate
No.

As of
Apr. 1984: Entered the Company
Apr. 2011: Deputy Chief Executive of Administrative Headquarters of Canon IT Solutions Inc.
Jul. 2013: Group Executive of Finance & Accounting Headquarters (present)
Apr. 2015: Executive Officer
Mar. 2016: Director & Vice President (present)
Jan. 2018: Director in charge of Group Finance & Accounting and Group Auditing(present)2
Shiro Hamada(August 31, 1961)
14,539 shares

Reason for Nomination as Director
Mr. Hamada led the Finance and Accounting field for many years. He has held the posts of
Director and Executive Officer, and has considerable experience and knowledge ofmanagement for the Company. Thus, he has again been selected as a candidate for a
Director.

10
Canon Marketing Japan Inc.

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

3
Hatsumi Hirukawa(January 8, 1965)
5,317 shares

As ofApr. 1987: Entered the Company
Jan. 2015: Business Solution Company Area Sales Headquarters Area Business Promotion
Group Senior General Manager
Jul. 2016: Planning Headquarters Group Executive
Apr. 2017: Executive Officer
Apr. 2019: Vice President (present)
Jan. 2020: Director in charge of Group Planning and Group Service & Support (present)
Director of Service & Support Headquarters (present)
Mar. 2020: Director (present)
Apr. 2020: Director in charge of Group Communication (present)
Reason for Nomination as Director
Mr. Hirukawa has led Business and Planning fields for many years. He has held the posts of
Director and Executive Officer, and has considerable experience and knowledge ofmanagement for the Company. Thus, he has again been selected as a candidate for a
Director.

Brief personal record, position, business in charge and important concurrent posts
As ofApr. 1984: Entered the Company
Apr. 2015: Group Executive of General Administration & Human Resources Management
Headquarters (present)
Apr. 2016: Executive Officer
Mar. 2018: Vice President (present)
Apr. 2019: Director in charge of Group General Administration & Human Resources
Management (present)
Jan. 2020: Director in charge of Group Procurement and Group Logistics (present)

Minoru Mizoguchi(May 21, 1960)
8,302 shares
New
Appointment

Reason for Nomination as Director
Mr. Minoru Mizoguchi has led the fields of General Affairs and Human Resources many
years. He has held the post of Executive Officer, and has considerable experience andknowledge of management for the Company and deserves to be involved in the Company's
management. Thus, he has been newly selected as a candidate for Director.

11
Canon Marketing Japan Inc.

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

5
Akio Dobashi(January 2, 1949)
0 shares

As ofApr. 1972: Entered Nichimen Company, Limited (presently Sojitz Corporation)
Apr. 2004: Representative Director, President & CEO of Sojitz 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
Jun. 2015: Outside Director of OSJB Holdings Corporation
Mar. 2016: Outside Director of the Company (present)
Jun. 2017: Outside Director of Maeda Corporation (present)
Important concurrent post
Outside Director of Maeda Corporation

OutsideIndependent

Reason for Nomination as Outside Director
Mr. Dobashi has actively performed as a top executive at a general trading company formany 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 and excellent expertise. Thus, he has again been
selected as a candidate for an Outside Director.
His term as an Outside Director will be five years as of the close of this Meeting.

12
Canon Marketing Japan Inc.

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

6
Yoshio Osawa(January 22, 1952)
0 shares
OutsideIndependent

As ofApr. 1975: Entered Sumitomo Corporation
Jun. 2003: Concurrent post as director of Sumitomo Computer Service Corporation(presently SCSK Corporation)
Apr. 2005: Executive Officer of Sumitomo Corporation
Apr. 2008: Managing Executive Officer of Sumitomo Corporation
Jun. 2008: Representative Director and Managing Executive Officer of Sumitomo
Corporation
Apr. 2011: Representative Director and Senior Managing Executive Officer of Sumitomo
Corporation
Apr. 2013: Representative Director, Assistant to President and CEO of Sumitomo
Corporation Adviser of SCSK Corporation
Jun. 2013: Representative Director, President & COO of SCSK Corporation
Apr. 2016: Chairman of the Board of the Directors, SCSK Corporation
Mar. 2018: Outside Director of the Company (present)
Jun. 2019: Outside Director of Citizen Watch Co., Ltd. (present))
Important concurrent post
Outside Director of Citizen Watch Co., Ltd.
Reason for Nomination as Outside Director
Mr. Yoshi Osawa has actively performed as a top executive at a general trading company
and IT services company for many years. He has considerable experience and excellent
expertise in company management. On this basis, we assessed that he could accomplish
the duties of outside director appropriately. Thus, he has been newly selected as a
candidate for an Outside Director. His term as an Outside Director will be three years as of
the close of this Meeting.

Notes: 1. None of the candidates for the Directors have any special interest in the Company.
2. Should Mr. Akio Dobashi and Mr. Yoshio Osawa be elected, the Company will make both of them independent directors under the regulation of the Tokyo Stock
Exchange, Inc.
3. Mr. Akio Dobashi has worked for Sojitz Corporation, which does business with the Company. Although there are transactions in areas such has business equipment
maintenance between Sojitz Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of Sojitz Corporationand the Company respectively. Mr. Akio Dobashi, therefore, meets the Company’s Independence Standards for Independent Directors/Audit & Supervisory Board
Members (please see page 15).
4. Mr. Yoshio Osawa has worked for Sumitomo Corporation and SCSK Corporation, both of which do business with the Company. Although there are transactions inareas such as software sales between Sumitomo Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenueof Sumitomo Corporation and the Company respectively. Similarly, although there are transactions in areas such has IT equipment and business equipment sales
between SCSK Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of SCSK Corporation and theCompany respectively. Mr. Yoshio Osawa, therefore, meets the standards for Independence Standards for Independent Directors determined by the Company(please see page 15).
5. The Company has entered into a contract with Mr. Akio Dobashi and Mr. Yoshio Osawa limiting the amount of their damages compensation liability defined in
Paragraph1, Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should they be elected, the Company will continue theaforementioned contract with them.
6. The Company has entered into a liability insurance policy for officers under which all the Directors are insured persons. The policy covers damage or losses that
may arise from their assuming liabilities in connection with their execution of duties or claims filed against them for such liabilities. If the candidates assume theoffice of Director, they will become insured persons under the insurance policy, which will be renewed during their term of office.

13
Canon Marketing Japan Inc.

(Reference) Structure and Other Details of the Board of Directors and the Audit & Supervisory Board
Structure of Board of Directors
We have established a structure that mainly consists of Representative Directors who oversee company-wide business strategies and their
execution, and Executive Directors who oversee each business domain or each headquarters function. In addition, two or more Independent
Outside Directors are included as members of the Board of Directors to ensure the soundness of management. The Board of Directors handles
important decision-making and oversees the performance status of business operations in accordance with laws and regulations.

Structure of Audit & Supervisory Board
As an auditing organization independent from the Board of Directors, the Audit & Supervisory Board consists of persons who have considerable
knowledge of the Company’s business and corporate management, and persons who are well-versed in accounting and other professional
fields. At least one of the Outside Audit & Supervisory Board Members is a person who satisfies the independence standards and qualifications
separately prescribed by the Board of Directors. The Audit & Supervisory Board made up of these Members works together with the accounting
auditors and the internal audit division of the Company to audit the execution of duties by Directors and the status of assets of the Company
to ensure the soundness of management.

Policies and procedures in the Nomination of Director and Audit & Supervisory Board Member Candidates
1. Policies
In principle, we select candidates for Directors and Audit & Supervisory Board Members appointed as higher positions from among the persons
who are recognized as being able to perform the corresponding duties fairly and accurately, who have deep insight, and who satisfy thefollowing requirements, regardless of their gender, nationality, age, or other personal attributes.
<Directors>
The candidates must have a true understanding of the Company’s corporate philosophy and Code of Conduct, a broad and deep understandingof the Company’s business and operations through experience gained as Executive Officers, etc., and must be able to make effective judgmentfrom a comprehensive perspective of multiple businesses and headquarters functions.
<Independent Outside Directors>
The candidates must satisfy the independence standards and qualifications separately prescribed by the Board of Directors and must have ahigh degree of professionalism and abundant experience in corporate management, risk management, law, economics, and other fields.
<Audit & Supervisory Board Members>
The candidates must have a high degree of professionalism and a wealth of experience in corporate management, financial and accounting
matters, internal controls, and other fields. One or more candidates for Outside Audit & Supervisory Board Members of the Audit & Supervisory
Board must satisfy the independence standards and qualifications separately prescribed by the Board of Directors.
2. Procedures
The Company established the voluntary “Nomination and Remuneration Advisory Committee” consisting of the President & Representative
Director, one Director and two Independent Outside Directors.
In nomination of candidates for Directors/Audit & Supervisory Board Members (including successor to President and candidates therefor),President recommend candidates from among persons who are recognized to satisfy the prescribed requirements and the fairness/
appropriateness of recommendation is checked by the nomination committee. Then the proposal therefor is submitted to and deliberated by
the Board of Directors.
In addition, in regards to candidates for Audit & Supervisory Board Members, deliberation at the Audit & Supervisory Board meeting is
conducted and the consent of the board is obtained prior to deliberation at the Board of Directors meeting.

14
Canon Marketing Japan Inc.

“Independence Standards for Independent Directors/Audit & Supervisory Board Members” of Canon Marketing Japan Inc.
Canon Marketing Japan Inc. hereby establishes the “Independence Standards for Independent Directors/Audit & Supervisory Board Members”
resolved by the board of directors with the consent of all Audit & Supervisory Board Members, in order to clarify the standards for ensuring
independence of Independent Directors/Audit & Supervisory Board Members of Canon Marketing Japan Inc., taking into consideration Japan’s
Corporate Governance Code (Principle 4.9) and the independence criteria set by securities exchanges in Japan.

Independence Standards for
Independent Directors/Audit & Supervisory Board Members
Canon Marketing Japan Inc. deems that a person who satisfies the requirements for Outside Directors/Audit & Supervisory Board
Members prescribed by the Companies Act of Japan, and meets the independence criteria set by securities exchanges in Japan,
and does not fall into any of the items below, is an “Independent Director/Audit & Supervisory Board Member” (a person who is
independent from the management of Canon Marketing Japan Inc. and unlikely to have conflicts of interest with generalshareholders).
1. A person/organization for which Canon Marketing Japan Group (Canon Marketing Japan Inc. and its subsidiaries; hereinafter
the same) is a major client, or a major client of Canon Marketing Japan Group, or an executing person of such organization orclient
2. A large shareholder of Canon Marketing Japan Inc., or an executing person of such shareholder
3. A person/organization receiving large amounts of contributions from Canon Marketing Japan Group, or an executing person ofsuch organization
4. A consultant, accounting professional or legal professional who has received a large amount of money or other properties from
Canon Marketing Japan Group, other than as compensation for being a Director/Audit & Supervisory Board Member (if therecipient is a corporation, partnership or any other organization, this item applies to any person belonging to said organization.)
5. A certified public accountant belonging to the audit firm engaged to conduct the statutory audit of Canon Marketing Japan
Group (including any such accountant to whom this item has applied in the last 3 fiscal years)
6. An executing person of another company in cases where an executing person of Canon Marketing Japan Inc. is an outside
director/Audit and Supervisory Board Member of such other company
7. An immediate family member (spouse and a relative within the second degree of kinship) of any of the persons listed in eachof items 1 to 6; provided, however that the persons to whom this is applicable shall be limited to key executing persons suchas directors, executive officers of companies and partners of advisory firms(Notes)* In item 1, “major” means in cases where the total amount (for any fiscal year during the last 3 fiscal years) of transactions between Canon Marketing Japan Group and such client
exceeds 1% of the consolidated sales of Canon Marketing Japan Group or such client.
* In item 2, “a large shareholder” means a shareholder who directly or indirectly holds 5% or more of the total voting rights of Canon Marketing Japan Inc.
* In item 3, “a large amount” means in cases where the total amount of contributions exceeds ¥12 million (in cases where the recipient is an individual) or 1% of the annual grossincome of such recipient (in cases where the recipient is an organization), for any fiscal year during the last 3 fiscal years of Canon Marketing Japan Inc.
* In item 1 to 3, and 6, an “executing person” means an executive director, executive officer and employee including manager (in items 1 to 3, including a person to whom this item
has applied in any fiscal year during the last 3 fiscal years).
* In item 4, “a large amount” means in cases where the total amount of money or other properties received by said consultant, etc., exceeds ¥12 million (in cases where the recipient
is a person) or 1% of the annual gross sales of such consultant, etc. (in cases where the recipient is an organization).

15
Canon Marketing Japan Inc.

Item No. 3: Payment of Bonuses to Directors
It is proposed that bonuses will be paid to the four Directors excluding the Outside Director as of the end of this fiscal
year, in appreciation of their services during this fiscal year, which totals ¥29,150,000 considering the results for this fiscal
year, etc. The Company established the policy for the determination of the details of Directors’ remuneration etc. on an
individual basis (hereinafter referred to as the “Policy to Determine the Details of the Remuneration of Individual
Directors”) at its Board of Directors meeting held on February 16, 2021, the summary of which is found on pages 19-20.
The Company considers this proposal appropriate, as it is in line with this policy.

Item No. 4: Revision of Performance‐based Stock Compensation Plan
The Company introduced a “Performance-based Stock Compensation Plan” (hereinafter the “Plan”) upon approval by the
51st Ordinary General Meeting of Shareholders held on March 27, 2019 of Item No. 4: “Determination of Compensationof Directors under Performance-based Stock Compensation Plan” (hereinafter, the resolution of this proposal at the said
Ordinary General Meeting of Shareholders is referred to as the “Initial Resolution”), to provide an incentive to Executive
Officers who are Vice Presidents or higher (including persons serving concurrently as Directors; excluding Outside
Directors) (hereinafter, referred to collectively as “Eligible Officers”) to achieve the full-year consolidated income plan.
In conjunction with the revision of the Companies Act and the Ordinance for Enforcement of the Companies Act, we
would like shareholders to grant approval for matters including the limit on the number of shares of common stock of
the Company to be delivered to the Eligible Officers (16,000 shares per year). The proposed revisions are as underlined
below.
This proposal is in line with the “Policy to Determine the Details of the Remuneration of Individual Directors,” which has
been established by the Company and the summary of which is stated on pages 19-20. Additionally, as the ratio of theshares of the common stock of the Company to be delivered based on the Plan to the total number of shares issued is
expected to be within 0.01% per year, the dilution ratio will be immaterial, and accordingly, the Company has determinedthat this proposal is appropriate.
Furthermore, if approval of Item No. 2 is obtained, we will have six Directors (6) (including two Outside Directors).
1. Outline of the Plan, etc.
<Outline of the Plan>
Under the Plan, the Company will deliver shares of its common stock as officer compensation to Eligible Officers of theCompany according to the degree of achievement of the full-year consolidated income plan (hereinafter the “Corporate
Performance Indicator”) during the time that the Eligible Officers are in office (hereinafter the “Eligible Period”).
Eligible Officers will only receive delivery of shares of common stock of the Company after they have retired from office.
The current limit on compensation of Directors of the Company was set and approved in the 39th Ordinary General

16
Canon Marketing Japan Inc.

Meeting of Shareholders held on March 28, 2007 at “not more than 800 million yen per year” and the Plan will grant
performance-based stock compensation to Directors who are Eligible Officers within this limit.
<Structure of the Plan>(1) The Company’s Board of Directors will establish stock compensation rules setting out details of the Plan such as
the method used to calculate shares of common stock of the Company to be delivered to Eligible Officers.
(2) For every fiscal year that comes to an end within the Eligible Period, the Company will, at a prescribed time,
determine the amount of compensation to be awarded to each Eligible Officer according to the degree ofachievement of the Corporate Performance Indicator and calculate the cumulative total of such amounts.
(3) When Eligible Officers retire from office, the Company will deliver to them a number of shares of its common stock
calculated according to the cumulative total of the compensation amounts.
(4) The Company will make delivery of shares of its common stock to Eligible Officers either through the issuance of
new shares or the disposal of treasury shares. The Company will grant monetary compensation receivables to
Eligible Officers and, the Eligible Officers will make in-kind contributions of the monetary compensation receivables
in return for the Company’s common stock at the time of such issuance of new shares or disposal of treasury shares.
2. Details of the Plan, including Calculation Method
Under the Plan, the monetary compensation receivables (hereinafter the “Individual Monetary Compensation Receivable
Amount”) granted for the delivery of shares of the Company’s common stock to each Eligible Officer will be determined
as follows.
<Monetary compensation receivables granted for the delivery of shares of the Company’s common stock to each Eligible
Officer>
Sum total of standard stock compensation amounts specified for each position adjusted for each Eligible Officer according
to the degree of achievement of the Corporate Performance Indictor in each fiscal year that ended within the Eligible
Period = Individual Monetary Compensation Receivable Amount<Method used to calculate the number of shares of the Company’s common stock to be delivered to each Eligible Officer>
The method used to calculate the number of shares of the Company’s common stock to be delivered to each Eligible
Officer (hereinafter the “Individual Number of Shares to Be Delivered”) will be as follows. The maximum number of sharesof common stock of the Company to be delivered to Directors who are Eligible Officers will be 16,000 shares per year
(However, if the Company performs a stock split (including allotment of common stock of the Company without
contribution) or consolidation of its common stock to become effective on or after the day on which this proposal isapproved, the Company will make adjustments to such total number of the shares as necessary in accordance with theratio of the stock split or the consolidation of its stock in a reasonable manner on or after the effective date of the stock
split or the consolidation of its stock.
[Method used to calculate Individual Number of Shares to Be Delivered]
For every fiscal year that comes to an end within the Eligible Period, the Company will, at a prescribed time, determine
the amount of compensation to be awarded to each Eligible Officer according to the degree of achievement of the
Corporate Performance Indicator and calculate the cumulative total of such amounts. When Eligible Officers retire from

17
Canon Marketing Japan Inc.

office, the Company will deliver to them a number of shares of its common stock calculated according to the cumulative
total of the compensation amounts. (Please refer to “Equation” below. Any fraction of less than one share will bediscarded.)In the case of changes in rank due to promotion, etc. partway through a fiscal year, the compensation amount for the
fiscal year in question will be adjusted in accordance with the stock compensation rules. Furthermore, if the total amountof compensation, etc. of Directors exceeds the limit on compensation for Directors approved at the General Meeting of
Shareholders by granting the monetary receivables for compensation amounts calculated in accordance with theforegoing, the Individual Number of Shares to Be Delivered to each Eligible Officer will be reduced by a reasonable
method determined by the Company’s Board of Directors (unless the Company has received approval for a revision of
the compensation limit at another General Meeting of Shareholders).
[Equation]
Individual Monetary Compensation Receivable Amount / Amount to be paid in per share on the issuance of new sharesor the disposal of treasury shares*＝Individual Number of Shares to Be Delivered* Amount to be paid in per share will be determined by the Board of Directors, provided, however, that such amountmust not be particularly advantageous to the Eligible Officers.
3. Conditions for Delivery of Shares of the Company’s Common Stock under the Plan
Upon retiring from office, Eligible Officers will be able to receive delivery of shares of the Company’s common stock after
completing the procedures prescribed in the stock compensation rules provided that they satisfy the following conditions
for delivery of shares of the Company’s common stock:(1) Recipient has served as an Eligible Officer of the Company during an Eligible Period since the start date of the Plan(includes an individual who newly became an Eligible Officer on or after the start date of the Plan).
(2) Recipient has retired from office as an Eligible Officer of the Company.
(3) The Individual Number of Shares to Be Delivered has been determined.
(4) Recipient is not an individual deemed by the Company’s Board of Directors as having committed (i) a material
breach of the Eligible Officer’s contract with the Company or (ii) illegal activity, or an individual who retired fromoffice at his or her own convenience against the Company’s wishes.
(5) Recipient has satisfied any other conditions deemed necessary by the Company to achieve the aim of the Plan.
4. Clawback Policy, etc.
An Eligible Officer will lose (in whole or in part) the right to receive delivery of the Company’s common stock based on
the Plan, or the Company may demand the return of money equivalent to the delivered shares, in the event of certain
incidents including a material breach of the Eligible Officer’s contract with the Company, or illegal activity.

18
Canon Marketing Japan Inc.

(Reference) Policy to Determine the Details of the Remuneration of Individual Directors
1) Basic Policy on Compensation
The Company endeavors to design officer compensation systems that will function as a framework for effectively
encouraging officers to fully demonstrate their abilities and fulfill their roles and responsibilities for the Group’s soundand sustainable growth. The Company’s basic policy is that the proprietary value of officer compensation should be set
at an appropriate level, taking into consideration the attraction and retention of talented human resources who can fully
meet the Company’s expectations.
2) Details of each compensation system
a. Representative Directors and Executive Directors
The compensation of Representative Directors and Executive Directors is made up of the following “basic
remuneration,” “bonus” and “performance-based stock compensation.”<Basic Remuneration>
Basic remuneration is a fixed amount paid monthly to Representative Directors and Executive Directors, as
compensation for the execution of their duties. It is a prescribed amount set in accordance with the position, role, anddegree of contribution of Representative Directors and Executive Directors. The total amount must not be more than
the amount approved by the General Meeting of Shareholders (However, the amount is the total amount of basic
remuneration for all Directors including Outside Directors).
<Bonus>The bonus is cash remuneration paid annually to Representative Directors and Executive Directors to reward theirachievements over the course of one year in office, and it uses consolidated profit before income taxes as an indicator,
which is the result of the Group’s operating activities over the course of a year. A standard bonus amount set inaccordance with the position of Representative Directors and Executive Directors is adjusted according to the degreeof achievement of the indicator.
Since the Company’s view is that bonuses are essentially a distribution of company profits along with dividends andretained earnings, the Company consults the Annual General Meeting of Shareholders for approval of the payment ofbonuses and the total amount to be paid calculated in accordance with the foregoing.
<Performance-based stock compensation>
The performance-based stock compensation is a system under which the Company delivers shares of its common stock
as officer compensation to Eligible Officers of the Company according to the degree of achievement of “consolidated
operating income” during the time that the Eligible Officers are in office. Eligible Officers will only receive delivery ofshares of common stock of the Company after they have retired from office. The total amount of compensation for
Directors must not be more than the amount approved by the General Meeting of Shareholders, and the performancebased stock compensation is to be granted to Directors who are Eligible Officers within such limit.
Monetary compensation receivables granted for the delivery of shares of the Company’s common stock to each Eligible
Officer are calculated as shown below.

19
Canon Marketing Japan Inc.

Sum total of compensation amounts specified for each position adjusted for each Eligible Officer according to thedegree of achievement of “consolidated operating income” in each fiscal year that ended within the period that the
Eligible Officer was in office = Individual Monetary Compensation Receivable AmountIn the event that an Eligible Officer was deemed by the Company’s Board of Directors as having committed an illegal
activity in their duties, the delivery of shares of the Company’s common stock may be withheld.
Given the importance of addressing management from a medium- to long-term perspective, emphasis will be placedon maintaining the levels and stability of basic remuneration while aiming to enhance the financial results for eachyear. Accordingly, the percentage of the bonus to basic remuneration and the percentage of performance-based stockcompensation to basic remuneration will be a maximum of 30% and 20%, respectively.
<Return of the Compensation>
With regard to the performance-based stock compensation, the Company may demand the return of thecompensation through a prescribed method even after the shares of common stock of the Company have beendelivered to an Eligible Officer, in the event that the Eligible Officer was deemed by the Company’s Board of Directors
as having committed an illegal activity.
b. Outside Directors
The compensation of Outside Directors, who perform duties from a position of independence from business execution,is limited to the basic remuneration, which is a fixed amount of monetary compensation paid each month asconsideration for the execution of duties.
The compensation of Outside Directors is determined within the limit of the annual amount determined by resolutionof the General Meeting of Shareholders stated in a. <Basic Remuneration> above, and within the limit of the amountdetermined in advance by the Company, taking general levels of compensation into consideration.
3) Remuneration Determination Process
The Company established the voluntary “Nomination and Remuneration Advisory Committee” consisting of the President& Representative Director, one Director and two Independent Outside Directors, for the purpose of ensuring thetransparency and objectivity of the remuneration determination process and the validity of the remuneration systems.
The Committee reviews the validity of the remuneration systems for Directors and Executive Officers in the positions ofVice Presidents or higher, including the standards for the calculation of basic remuneration and bonuses and thestandards for granting performance-based stock compensation, and reports to the Board of the Directors to the effectthat the systems were valid.
The individual compensation amounts of Directors are determined by the President & Representative Director, who has
been delegated the authority to determine the details, based on the remuneration systems that have been reviewed by
the Nomination and Remuneration Advisory Committee.
With regard to bonuses, the Company consults the General Meeting of Shareholders for approval of the payment ofbonuses and the total amount to be paid on each occasion, as stated in 2) a. <Bonus> above.

20
Canon Marketing Japan Inc.

BUSINESS REPORT (January 1, 2020 to December 31, 2020)
1. CurrentConditionsofCanonMarketingJapananditsconsolidatedsubsidiaries(the“Group”)(1) Business Progress and Achievement
General Business Conditions
The Japanese economy continued to face difficult conditions this fiscal year due to the impact of the spread of COVID-19.
Although there were signs of a pickup in consumer spending due to the provision of benefits by the government andconsumption stimulus measures, it fell sharply as people refrained from going out and there were requests for business closures.
As for capital investment by businesses, although IT investment was strong, a trend of restraint continued due to the outlookof prolonged effects of the COVID-19 pandemic. Although economic indicators are showing signs of improvement, COVID-19 isspreading again, and there are no prospects on when it will end, leading to concerns that the negative impact on the global
and Japanese economy will be prolonged.
Against this economic backdrop, although the Company saw increases in sales of related products and services in line with thegrowing demand for telework, the market for mainstay business equipment and digital interchangeable lens cameras declined
significantly, and sales activities were severely limited due to the company-wide rotating holidays from April to May. As a result,net sales decreased to ¥545,060 million (down 12.2% from the previous fiscal year).
In terms of income, although the Company continued to thoroughly reduce SG&A expenses and worked to expand sales ofconsumer products, especially high-value-added products, operating income was ¥31,317 million (down 3.5% from theprevious fiscal year) due to the significant decrease in gross profit caused by the decline in sales. Ordinary income increased to¥35,236 million (up 3.8% from the previous fiscal year) due to the receipt of subsidies for employment adjustment, and profit
attributable to owners of parent decreased to ¥21,997 million (down 1.1% from the previous fiscal year) due to extraordinary
losses.

Constitution of Net Sales by Segment

Professional
Net sales ¥30,710 million

6%22%

Consumers
Net sales ¥124,874 million

42%

Area
Net sales ¥235,766 million

30%

Other *Net sales ¥(17,528)
million21
Canon Marketing Japan Inc.

Enterprise
Net sales ¥171,237 million

The constitution is calculated based on the simple
total of the net sales of each segment.
* “Other” includes call centers, BPO service businessand elimination of inter-segment transactions.

¥124,874 million
Operating income ¥12,218 million

Business Conditions by Segment

Net sales

Consumers

Although demand for digital cameras temporarily increased due to factors including the Go To Travel campaign, demandfor digital cameras remained weak as the purchasing sentiment of individual customers was still low due to voluntary
restraint in going out. In addition, camera dealers and mass retailers had to temporarily close or shorten their businesshours, limiting sales opportunities. While the Company received favorable reviews for the EOS R5, EOS R6, and EOS Kiss
M2 mirrorless cameras launched in the fiscal year under review, sales of digital interchangeable lens cameras andcompact digital cameras declined significantly.
Demand for home-use inkjet printers grew significantly due to an increase in teleworking and online learning, and sales
were strong especially for high-value-added products such as the new products launched during the fiscal year underreview. In addition, products equipped with the GIGA TANK, an extra-large capacity tank, continued to perform well,resulting in a significant increase in inkjet printer sales. Sales of ink cartridges decreased due to a shrinking market caused
by a decline in color printing and New Year's cards.
Sales of IT products increased significantly due to an increase in PC peripherals as a result of growing demand forteleworking and continued growth in sales of gaming PCs.
As a result, net sales in this segment totaled ¥124,874 million (down 6.0% from the previous fiscal year). Operating
income was ¥12,218 million (up 78.0% from the previous fiscal year) due to efforts to secure profits by increasing thecomposition ratio of high-value-added products, assessing market conditions, and controlling SG&A expenses, mainly
advertising expenses.

Mirrorless camera EOS R5

Printer with the extra-large capacity tank GIGA TANK

22
Canon Marketing Japan Inc.

BUSINESS REPORT¥171,237 million
Operating income ¥8,920 million

Business Conditions by Segment

Net sales

Enterprise

In mainstay business equipment, sales of office MFPs decreased due to a weak market since the beginning of the year
and a decrease in the number of projects due to restrictions on sales activities as a result of the implementation ofrotating holidays. As for laser printers, in the same manner as with office MFPs, sales were down due to the impact ofrestrictions on sales activities and the absence of several large projects recorded in the previous fiscal year. Sales ofmaintenance services for office MFPs and laser printer cartridges decreased due to a decline in print volume in offices ascustomers continued to telework.
In IT solutions for large companies, although orders improved toward the fourth quarter, sales decreased due to theabsence of the replacement demand for business PCs following the end of support for Windows 7 and large-scale projects
in SI services and infrastructure systems recorded during the previous fiscal year, as well as a decrease in projects anddelays caused by factors including reduced sales activities.
As a result, net sales in this segment totaled ¥171,237 million (down 12.6% from the previous fiscal year). Operating
income was ¥8,920 million (down 11.4% from the previous fiscal year).

Nishi-Tokyo Data Center

23
Canon Marketing Japan Inc.

¥235,766 million
Operating income ¥9,898 million
Net sales

Business Conditions by Segment

Area

Despite the progress in the fourth quarter in starting up office MFP projects that had been postponed, sales of mainstay
business equipment, such as office MFPs and laser printers declined due to the sluggish market since the beginning of
the year and restrictions on sales activities caused by the implementation of rotating holidays. Sales of maintenanceservices and laser printer cartridges decreased due to a decline in print volume caused by the continued impact oftelework, although sales have gradually recovered.
As for IT solutions for SMEs, needs for establishing a telework environment remained high, and the cloud-based IT
support service HOME performed well, while performance for security products such as the anti-virus software ESET and
firewall equipment improved. The Company also focused on acquiring maintenance and operation services forcustomers' IT equipment, and the number of orders received increased. Meanwhile, despite demand for telework, salesof business PCs decreased due to factors such as the reactionary decline from the large growth in replacement demandin the previous fiscal year following the end of Windows 7 support. As a result, sales of IT solutions decreased.
As a result, net sales in this segment totaled ¥235,766 million (down 12.1% from the previous fiscal year). Operating
income came to ¥9,898 million (down31.3% from the previous fiscal year).

IT support cloud service for SMEs, HOME

Antivirus software ESET

24
Canon Marketing Japan Inc.

BUSINESS REPORTBusiness Conditions by Segment

Professional

Net sales¥30,710 million

Operating income¥1,879 million(Production Printing)In the production printing business, the Company provides high-speed continuous feed printers and high-speed cut sheet
printers mainly for the printing industry. The Company also provides services related to POP production for the retailindustry. During the fiscal under review, despite growth in sales of products such as monochrome continuous feed
printers, sales declined due to a decrease in sales of consumables resulting from a decline in print volume, as well as adecrease in POP production-related business.

(Industrial Equipment)
In the industrial equipment business, the Company provides manufacturing-related equipment, inspection andmeasurement devices, and other products mainly to semiconductor manufacturers. During the fiscal year under review,
although sales of semiconductor manufacturing systems increased, sales declined due to a decrease in sales of inspection
and measurement devices.

(Healthcare)
In the healthcare business, the Company provides system development and platform construction, mainly electronic
medical records for hospitals and clinics, and also provides products such as receipt computers for dispensing pharmacies.
During the fiscal year under review, sales increased due to several large-scale projects for the construction of electronic
medical records and medical IT platforms for hospitals, despite the absence of the large-scale projects for dispensing
pharmacies in the previous fiscal year. The Company transferred all shares of its consolidated subsidiary Canon Lifecare
Solutions Inc. to Canon Medical Systems Corporation in January 2020. In the previous fiscal year, Canon Lifecare Solutions
Inc. posted net sales of ¥11.0 billion and operating income of ¥0.1 billion.
As a result, net sales in this segment totaled ¥30,710 million (down 29.7% from the previous fiscal year). Operating
income increased to ¥1,879 million (up 16.3% from the previous fiscal year) due to factors including a decrease in SG&A
expenses.

Electronic Medical Records for hospitals and clinics

25

Canon Marketing Japan Inc.

(2) Capital Expenditures
The capital expenditures by the Group during this fiscal year totaled ¥12,746 million, which are mainly for rented assets,
tools, fixtures and fittings, and ancillary facilities at our Nishi-Tokyo Data Center.

(3) Issues to be Addressed
While the Japanese economy is likely to enter a recovery trend, we expect that the outlook will remain unclear due tothe COVID-19 pandemic and fluctuations in financial and capital markets, and other factors.
Against this economic backdrop, the Group aims to become a “highly profitable business group” in the medium to longterm management plan. We believe our challenges will be reforming our business portfolio with the aim of achievingthat goal, and building the new mechanisms and systems that will support that reform.
With regard to reforming our business portfolio, the Company will work to expand high-value-added business in IT
solutions, where growth of the market is expected and which we have positioned as a growth business. Although Canon’smajor product business is not expected to grow significantly in the Japanese market, we consider it as a challenge for us
to further improve productivity, and maximize both sales and unit sales with a priority on earning profit.
As for building mechanisms and systems for the Company, we see our challenges as integrating into our management
strategy the hiring of diverse human resources for the development of leaders that will promote reform and the nextgeneration management team, work style reforms utilizing IT, and promoting sustainability and strengthening risk
management.
We have set five important management challenges derived from the above, and will undertake the following initiatives.
[Five important management issues and initiatives in fiscal 2021]
1) Creation of high-value-added businessWe will establish a sales system for each customer base, and will work to enhance and expand differentiated solutions
by narrowing down our industry and business domains.
2) Enhancing profitability of Canon’s major product businesses
In Canon’s major product businesses, we will accelerate our profit-oriented sales strategy. Accordingly, we will work toincrease the productivity of customer engineers by making logistics operations efficient, through means such as levelingout the quantity of goods for the promotion of worker-friendly logistics, enhancing the response capability of our contact
center which is the front line for contact with customers, and further promoting the use of IoT technology.
3) Development and promotion of diverse human resources
We will improve the expertise of our employees through training and support in getting certifications, and will accelerate
the recruitment of professional personnel from outside the Company who are adept in specific fields. We also support
the “Action Plan on Women’s Active Participation in the Workforce” issued by KEIDANREN (Japan Business Federation).
We have also formulated our own action plan, based on which we will work to improve diversity such as by promoting
active participation of women in the workplace.

26
Canon Marketing Japan Inc.

4) Promotion of work style reforms
In addition to our past activities such as thorough implementation of workdays without overtime and reduction of
overtime work hours, we will utilize location-free work styles and IT technologies to increase the productivity of individual
employees. We will examine and execute reform through newly launched projects, in order to allow employees toeffectively utilize the extra time created.
5) Strengthening risk management and promoting sustainability
We will rebuild our management system to combat new risks that have a major impact on corporate management, suchas the COVID-19 pandemic as well as increasingly frequent and severe natural disasters. In addition, we will solve various
social issues through our business, and have the committee established newly this year conduct discussions andexaminations, in order to become a sustainable corporate group that can contribute to society.
By addressing these challenges, the Group will strive to restore operating income to the level before the COVID-19
outbreak, expand our business operations, and improve our performance.

27
Canon Marketing Japan Inc.

BUSINESS REPORT(4) Status of Assets and Earnings
Consolidated

Net sales(Millions of yen)

Operating income(Millions of yen)

Ordinary income(Millions of yen)

49th Fiscal Year

50th Fiscal Year

51st Fiscal Year

52nd Fiscal Year

53rd Fiscal Year

(Jan. 1, 2016
to Dec. 31, 2016)(Jan. 1, 2017
to Dec. 31, 2017)(Jan. 1, 2018
to Dec. 31, 2018)(Jan. 1, 2019
to Dec. 31, 2019)(Jan. 1, 2020
to Dec. 31, 2020)

629,313632,189

621,591

621,134

545,060

27,67630,40628,941

32,43931,31728,71731,491

30,51933,93735,23618,161

20,67920,82622,25021,997

Profit attributable to ownersof parent (Millions of yen)
Profit attributable to ownersof parent per share (Yen)
Total assets

140.06

159.48160.61

171.60169.65

497,727

510,832

498,790503,698

506,604

Net assets

280,919

297,522

303,570

325,092

346,114(Millions of yen)

(Millions of yen)

Note: Profit attributable to owners of parent per share is calculated based on the weighted average number of outstanding shares during the year.

(5) Main Business
Segment

Business

Consumers

Provides products such as digital cameras and inkjet printers primarily to individual customers.

Enterprise

Sells Canon input and output devices and provides solutions that contribute to solving businessproblems in each industry for large companies.

Area

Sells Canon input and output devices and provides solutions that help customers solve businessproblems for small and medium-sized businesses in Japan.

Professional

Provides solutions for customers in each area.
(Production Printing) Provides high-speed continuous feed printers and high-speed cut sheet
printers to the printing industry.
(Industrial Equipment) Provides products such as semiconductor manufacturing systems andinspection and measurement devices mainly to semiconductor manufacturers and other electronics
device manufacturers.
(Healthcare) Provides IT solutions, system development, network construction, and hardware forthe medical and healthcare field.

28
Canon Marketing Japan Inc.

BUSINESS REPORT(6) Main Location of Operations
The Company

Principal Subsidiaries

Headquarters

Tokyo

Canon IT Solutions Inc.

Makuhari Office

Chiba

Canon System & Support Inc.

Sapporo Branch

Hokkaido

Sendai Branch

Miyagi

Nagoya Branch

Aichi

Osaka Branch

Osaka

Hiroshima Branch

Hiroshima

Fukuoka Branch

Fukuoka

Konan OfficeTokyo

Canon Production Printing Systems Inc.

(7) Employees
Consolidated

Number of Employees

Change from the end of the previous fiscal year

16,544 persons

Decrease of 457 persons from the previous fiscal year

Segment

Number of Employees

Consumers

587 persons

Enterprise

5,083 persons

Area

6,213 persons

Professional

805 persons

Other3,856 persons

Change from the end of the previous fiscal
year
Increase of 40 persons from the previous fiscal
year
Increase of 3 persons from the previous fiscal
year
Decrease of 96 persons from the previous fiscal
year
Decrease of 334 persons from the previous fiscal
year
Decrease of 70 persons from the previous fiscal
year

29
Canon Marketing Japan Inc.

(8) Parent Company and Principal Subsidiaries
Parent Company
ParentCompany
Name

Location

Activities

Number of Voting
Rights (Ratio of
Voting Rights)

Relation with the Company

Canon Inc.

Ohta-kuTokyo

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

757,086(58.5%)The Company is comprehensively conducting to sales,
services and marketing of the products manufactured by
the Parent Company in the Japan market.

Matters about the Transactions with Parent Company, etc.
The Company holds the exclusive right to sell within Japan all products, excluding semiconductor exposure devices,liquid crystal substrate exposure devices, and medical devices, manufactured by Parent Company under the Canonbrand. In purchasing such products, the terms are negotiated and determined by presenting the preferred prices fromthe Company taking into account market prices.
The Company sells consumables for office equipment to the Parent Company. The terms are negotiated anddetermined after taking into account the Company’s cost and market prices. 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 theCompany’s profit is not harmed in the transactions with the Parent company.
Principal Subsidiaries
Company Name

Capital Stock(millions of yen)

Ratio of Voting
Rights of theCompany (%)

BusinessCanon IT Solutions Inc.

3,617

100.0

SI and consulting, IT service and development and sale of various
softwareCanon System & Support Inc.

4,561

100.0

Consulting, sales, support and maintenance services for Canon
products and the IT solutions of other companies

Canon Production Printing Systems Inc.

2,744

100.0

Sales of high-speed continuous feed printers and high-speed cut
sheet printers as well as consumables, provision of maintenanceservices, and provision of printing services, etc. etc.

Consolidated Status
1. The number of consolidated subsidiaries was 17.
2. The Company transferred all shares of its subsidiary Canon Lifecare Solutions Inc. to Canon Medical Systems
Corporation on January 1, 2020.
3. Effective July 1, 2020, the Company's subsidiary Canon IT Solutions Inc. took over the business belonging to
Educational Industry Sales Group through an absorption-type company split.
4. Effective July 1, 2020, the Company's subsidiary Canon ITS Medical Inc. took over the business belonging to Medical
Solution Development Division through an absorption-type company split.

30
Canon Marketing Japan Inc.

BUSINESS REPORT

2. Status of Shares of the Company(1) Total Number of Shares Authorized 299,500,000 shares(2) Total Number of Issued Shares, Capital Stock, Number of Shareholders
As of the end of the Previous fiscal
Year151,079,972

Decrease of 20,000,000

73,303,082,757-

Total number of issued shares (shares)
Capital stock (yen)Change during This fiscal
Year

Number of shareholders (persons)11,442As of the end of This fiscal
Year131,079,972
73,303,082,757

Decrease of 188

11,254

Note: At the Board of Directors meeting held on February 26, 2020, the Company passed a resolution to retire treasury stock in accordance with the provisions ofArticle 178 of the Companies Act, and the Company retired 20,000,000 shares of treasury stock on March 11, 2020.

(3) Major Shareholders
Name of Shareholders

Number of Shares Held(thousands of shares)

Shareholding Ratio (%)

75,708
5,860
4,754
2,669
1,517
1,347

58.4
4.5
3.7
2.1
1.2
1.0

1,219

0.9

1,192
1,001
997

0.9
0.8
0.8

Canon Inc.
Canon Marketing Japan Group Employee Stock Ownership Association
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
STATE STREET BANK AND TRUST COMPANY 505001
SMBC Nikko Securities Inc.
Canon Marketing Japan Group Business Partner Stock Ownership
Association
The Bank of New York, Treaty JASDEC AccountMizuho Bank, Ltd.
Custody Bank of Japan, Ltd. (Trust account 9)

Note: The shareholding ratio is calculated by deducting the number of treasury shares (1,412,822 shares) from the total number of issued shares.

(4) Shareholding Ratio by Category
Financial
institutions

12.7%

Other domestic companies

58.9%

Securities companies 2.0%

Foreigncompanies, etc.

Individuals
and others

12.2%

13.1%
Treasury shares 1.1%

31
Canon Marketing Japan Inc.

3. Status of Directors and Audit & Supervisory Board Members(1) Directors and Audit & Supervisory Board Members
Position

Name

Business in Charge or Important Concurrent Posts

President & Representative Director
Executive President

Masahiro Sakata

Director Senior Vice President

Masachika Adachi

Director Vice President

Shiro Hamada

Director in charge of Group Finance & Accounting and Group Audits

Director Vice President

Hatsumi Hirukawa

Director in charge of Group Planning, Group Service & Support andGroup Communication

Director

Akio Dobashi

Outside Director of Maeda Corporation

Director

Yoshio Osawa

Outside Director of Citizen Watch Co., Ltd.

Audit & Supervisory Board Member

Shinichi Inoue

Audit & Supervisory Board Member

Masatoshi Tanise

Audit & Supervisory Board Member

Iwao Hashimoto

Audit & Supervisory Board Member

Nobutoshi Matsumoto

Audit & Supervisory Board Member

Shigeo Hasegawa

Director of Enterprise Business Unit

Notes: 1. Director Mr. Hatsumi Hirukawa and Audit & Supervisory Board Members Mr. Masatoshi Tanise, Mr. Iwao Hashimoto, and Mr. Nobutoshi Matsumotowere appointed at the 52nd Ordinary General Meeting of Shareholders held on March 26, 2020 and each of them assumed office.
2. Mr. Akio Dobashi and Mr. Yoshio Osawa all of whom are Directors are Outside Directors.
3. Mr. Iwao Hashimoto, Mr. Nobutoshi Matsumoto and Mr. Shigeo Hasegawa all of whom are Audit & Supervisory Board Members are Outside Audit &Supervisory Board Members.
4. The Company has notified Directors Mr. Akio Dobashi and Mr. Yoshio Osawa as independent directors and Audit & Supervisory Board Members Mr. Iwao
Hashimoto and Mr. Shigeo Hasegawa as independent Audit & Supervisory Board Members to Tokyo Stock Exchange, Inc. on which the Company is listed
as provided under the regulations of Tokyo Stock Exchange, Inc.
5. Mr. Nobutoshi Matsumoto is an Audit & Supervisory Board Member and has accounting experience in Canon Inc., our parent company, for many years
and has a wealth of expertise in finance and accounting.
6. Mr. Shigeo Hasegawa is an Audit & Supervisory Board Member and qualified as a Certified Public Accountant and has a wealth of expertise in finance andaccounting.
7. 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 of Japan, to the limit of amount set forth in
the Paragraph 1, Article 425 of the Companies Act of Japan.

32
Canon Marketing Japan Inc.

BUSINESS REPORT(2) Remuneration to Directors and Audit & Supervisory Board Members
Directors 7 persons ¥246 million
Audit & Supervisory Board Members 8 persons ¥100 million
Notes: 1. The total amount of remuneration paid to 2 Outside Directors and 5 Outside Audit & Supervisory Board Members is ¥73 million.
2. The above number of persons includes one Director and three Audit & Supervisory Board Members who retired from office at the closeof the 52nd Ordinary General Meeting of Shareholders held on March 26, 2020.
3. Directors’ remuneration include provision for directors’ bonuses for this fiscal year in the amount of ¥29 million.

(3) Status of Outside Director and Outside Audit & Supervisory Board Members
Relation Between Important Organization of Concurrent Post and the Company
Name

Concurrent Post

Organization of Concurrent Post

Relation with theCompany

Akio Dobashi(Outside Director)

Outside Director

Maeda Corporation

No special relation

Yoshio Osawa(Outside Director)

Outside Director

Citizen Watch Co., Ltd.

No special relation

Principal Activities
Name

Principal
Activities

Akio Dobashi(Outside Director)

Attended all 18 Board of Directors meetings held during this fiscal year, and provided input based on his
experience and knowledge in the field of corporate management.

Yoshio Osawa(Outside Director)

Attended all 18 Board of Directors meetings held during this fiscal year, and provided input based on his
experience and knowledge in the field of corporate management.

Iwao Hashimoto(Outside Audit & Supervisory
Board Member)
Nobutoshi Matsumoto(Outside Audit & Supervisory
Board Member)
Shigeo Hasegawa(Outside Audit & Supervisory
Board Member)

Attended all 13 Board of Directors meetings and all 10 Audit & Supervisory Board meetings held after
assuming office out of 18 Board of Directors meetings and 17 Audit & Supervisory Board meetings held
during this fiscal year, respectively, and provided input based on his experience and knowledge in thefield of corporate management.
Attended all 13 Board of Directors meetings and all 10 Audit & Supervisory Board meetings held after
assuming office out of 18 Board of Directors meetings and 17 Audit & Supervisory Board meetings held
during this fiscal year, respectively, and provided input based on his experience and knowledge in thefield of accounting.
Attended all 18 Board of Directors meetings and all 17 Audit & Supervisory Board meetings held during
this fiscal year, and provided input based on his knowledge as a Certified Public Accountant.

33
Canon Marketing Japan Inc.

4. Status of Accounting Auditor(1) Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC
Note: EY Ernst & Young ShinNihon LLC, which was the Accounting Auditor of the Company, retired due to expiration of its term of office at the conclusion of
the 52nd Ordinary General Meeting of Shareholders held on March 26, 2020.

(2) Remuneration and Other Amounts to Accounting Auditor for This Fiscal Year
Amount(i) Remuneration and other amounts payable by the Company for the services defined in Paragraph 1, Article 2of the Certified Public Accountants Act¥108 million(ii) Total amount of cash and other financial benefits payable by the Group to the Accounting Auditor¥172 million

Notes: 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 Companies Act and in accordance with the Financial
Instruments and Exchange Act. Accordingly, the amounts shown in (i) above represent total amounts of remuneration and other amounts for bothof these auditing services.
2. The Company pays consideration to accounting auditors for work concerning agreed upon procedures other than the work specified in Article 2,
Paragraph 1 of the Certified Public Accountings 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 fiscal year, and the estimated remuneration for this fiscal year. 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.

(3) Policy Regarding Decision on Either Dismissal or Non‐Reappointment of the 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 the item to be proposed at a General Meeting of Shareholders regarding
the dismissal or non-reappointment of the Accounting Auditor.

34
Canon Marketing Japan Inc.

BUSINESS REPORT

5. Policy Regarding Decision of Dividends from Surplus, etc.
The Company made its basis policy, with respect to profit distribution, to pay the dividends 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 dividends for this fiscal year, the Company plans to pay a year-end dividends of 40 yen per share, totaling 60
yen per share (consolidated payout ratio of 35.4%) as a full-year dividends together with the interim dividends (20 yen
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 ownersof parent per share are rounded off to two decimal places.

35
Canon Marketing Japan Inc.

Consolidated Balance Sheets(Millions of yen, amounts less than one million yen are rounded down)

As ofDec. 31, 2020

As ofDec. 31, 2019

 Assets
Current assets
Cash and deposits
Notes and accounts receivable
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other
Allowance for doubtful receivables
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery,equipmentandvehicles,net
Furniture and fixtures, net
Rental assets, net
Land
Lease assets, net
Construction in progress
Intangible assets
SoftwareLease assets
Right of using facilities
Other
Investments and other assets
Investments in securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Lease deposits
Other
Allowance for doubtful receivables¥380,349
59,631
105,328500
27,091
103
631
180,006
7,122(66)
126,255
83,72943,402
87
3,004
7,281
28,359
16
1,577
5,669
5,373
1
294
0
36,855
11,30235
415
19,219
3,427
2,659
(205)

¥377,403
53,993112,666
500
33,281
206
622
170,0126,197(75)
126,295
82,813
26,948
99
3,315
9,403
28,91831
14,095
4,469
4,148
2
315
2
39,011
11,03735393
20,792
4,358
2,775
(382)

Total assets¥506,604¥503,698

 Liabilities
Current liabilities
Notes and accounts payable
Lease obligations
Accrued expenses
Accrued Income taxes
Consumption taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
Provision for loss on order received
Other
Non-current liabilities
Lease obligations
Deferred tax liabilities
Allowance for long-term continuous
service rewards

Net defined benefit liabilities
Other
Total liabilities Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive Income
Valuation difference on
available-for-sale securities
Deferred gains or losses hedges
Foreign currency translation adjustments
Remeasurementsof defined benefit plans
Non-controlling interests
Total net assets
Total liabilities and net assets

36
Canon Marketing Japan Inc.

As of
Dec. 31, 2020

As ofDec. 31, 2019¥108,440
44,10754
16,166
7,004
5,547
5,664
75
453
8
29,35652,04974
1951¥120,023
51,542
72
17,855
8,235
5,901
3,373
99
651
189
32,10158,582103
1,042

47,883
3,139
160,490

53,956
3,480
178,606

342,495
73,30382,814
188,481(2,103)
2,962
4,230

326,979
73,30382,820202,783(31,926)(2,504)
3,929

(29)
5
(1,243)655
346,114¥506,604

11
51(6,497)616
325,092¥503,698CONSOLIDATED FINANCIAL STATEMENTS

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

From January 1, 2020
to December 31, 2020
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Gain on investments in investment partnerships
Subsidies for employment adjustment
Other
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investments in securities
Other
Extraordinary losses
Loss on sales and disposal of non-current assets
Impairment loss
Loss on sales of shares of subsidiaries and associates
Loss on valuation of investment securities
Loss on COVID-19
Other
Income before income taxes
Income taxes-current
Income taxes-deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent¥545,060
361,077
183,982
152,665
31,317
4,106
243
155
452
231
2,744
279
187
12
5
169
35,236
581
283
278
20
2,355
1,021
737
316
274
4
33,463
12,525(1,133)22,071
73¥21,997

37
Canon Marketing Japan Inc.

From January 1, 2019
to December 31, 2019
¥621,134
420,107
201,026
168,586
32,439
1,667
196
154
767
247
302
169
12
157
33,937
15
13
2
649
206
82
329
31
33,302
12,626(1,663)
22,33989¥22,250

Non‐Consolidated Balance Sheets(Millions of yen, amounts less than one million yen are rounded down) Assets
Current assets
Cash and deposits
Notes receivable
Electronically recordedmonetary claims - operating
Accounts receivable
Securities
Merchandise and finished goods
Raw materials and supplies
Advance payment - trade
Prepaid expenses
Short-term loans receivable
Accounts receivable - other
Forward exchange contracts
Other
Allowance for doubtful receivables
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery
Furniture and fixtures
Rental assets
Land
Lease assets
Intangible assets
SoftwareRight of using facilities
Other
Investments and other assets
Investments in securities
Shares of subsidiaries and associates
Claimsprovableinbankruptcy,claimsprovableinrehabilitationandother

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

As ofDec. 31, 2020

As ofDec. 31, 2019

¥348,145
44,703
1,543
8,296¥344,084
37,246
1,993
8,214

83,256500
22,524
491
1,585
814
180,006
4,131
350
(59)
140,567
49,737
12,588
467
87
1,418
7,270
27,899
4
4,599
4,488
110
0
86,231
8,935
59,686
128

90,034500
27,318
512
1,692
832
170,206
5,193
16
384
(61)
145,287
52,784
13,178
481
99
1,660
9,402
27,952
10
3,377
3,266
110
0
89,124
8,729
63,366293

1,019
14,070
1,381
1,167
(158)

826
13,058
1,905
1,272
(328)

¥488,713¥489,371

 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
Forward exchange contracts
Provision for bonuses
Provision for directors’ bonuses
Provision for product warranties
Non-current 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
General reserve
Retained earnings brought forward
Treasury stock
Valuation and translation
adjustments
Valuation difference on availablefor-sale securities
Deferred gains or losses hedges
Total net assets
Total liabilities and net assets

38
Canon Marketing Japan Inc.

As of
Dec. 31, 2020

As ofDec. 31, 2019

¥139,648
1,046¥153,708
1,678

42,44455,3002
1,898
12,256
5,828
3,451
10,356
2,948
42
3,598
29
446
40,4392
36,416573

47,81861,5007
2,753
14,324
6,554
2,933
10,504
3,343
1,718
35
534
38,237
4
33,868673

3,447
180,087

3,691
191,945

305,486
73,30385,19885,198149,091
2,853
146,238
81,70064,538(2,107)
3,139

294,482
73,30385,20485,1985
167,905
2,853
165,051
81,70083,351(31,930)
2,943

3,168

2,932

(29)
308,625¥488,713

11
297,426¥489,371

NON‐CONSOLIDATED FINANCIAL STATEMENTS

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

From January 1, 2020
to December 31, 2020
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Gain on investments in investment partnerships
Subsidies for employment adjustment
Other
Non-operating expenses
Interest expenses
Share related expenses
Other
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investments in securities
Other
Extraordinary losses
Loss on sales and disposal of non-current assets
Impairment loss
Loss on valuation of shares of subsidiaries and associates
Loss on COVID-19
Loss on valuation of investment securities
Other
Income before income taxes
Income taxes-current
Income taxes-deferred
Profit¥412,800
290,863
121,936
103,854
18,082
7,821
240
5,721
451
231
1,028
147
180
54
52
74
25,723
60
11
48
0
1,561
1,020
220
316
4
24,222
7,680(1,099)¥17,641

39
Canon Marketing Japan Inc.

From January 1, 2019
to December 31, 2019
¥473,229
341,303
131,926
116,257
15,669
3,513
193
2,204
758
246
111
195
57
53
84
18,987
1
1
581
193
50
329
8
18,407
7,088(1,969)¥13,287

AUDIT REPORT OF ACCOUNTING AUDITOR ON CONSOLIDATED FINANCIAL STATEMENTS(TRANSLATION)

Report of Independent Auditors
February 9, 2021

The Board of Directors
Canon Marketing Japan Inc.

Deloitte Touche Tohmatsu LLC
Tokyo OfficeTeruhisa Tamai
Masahiro Ide
Shinji Hatano

Certified Public Accountant
Designated and Engagement Partner
Certified Public Accountant
Designated and Engagement Partner
Certified Public Accountant
Designated and Engagement Partner

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprise the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of changes in net assets and the notes to the consolidated financial statements of Canon Marketing Japan Inc. (the “Company”) for the fiscal year fromJanuary 1, 2020 through December 31, 2020.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results of operations of Canon Marketing Japan Inc., which consistsof the Company and its consolidated subsidiaries, for the period covered by the consolidated financial statements in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of theConsolidated Financial Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management and the Audit & Supervisory Board Members and the Audit & Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for designingand 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.
In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare the consolidated financial statements in accordance with the premiseof a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible for monitoring the execution of Directors’ duties related to designing and operating the financial reporting
process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to express
an opinion on the consolidated financial statements from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemedmaterial if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, and perform the following while maintaining professional skepticism.
・Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures to address the risks of material misstatement. The audit procedures shallbe selected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
・In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the consolidated financial statements is not to express an opinion on the effectiveness of the entity’s internal control.
・Assess the appropriateness of accounting policies adopted by management and the method of their application, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
・Determine whether it is appropriate for management to prepare the consolidated financial statements on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to the consolidated financial statements in the audit report, or if the notes to the consolidated financial
statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the consolidated financial statements. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable to continue as a going concern.
・Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordance with accounting principles generally accepted in Japan, assess the presentation,
structure, and content of the consolidated financial statements including related notes, and whether the consolidated financial statements fairly present the transactions and accounting events on
which they are based.
・Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated subsidiaries in order to express an opinion on the consolidated financial
statements. The auditor is responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, and is solely responsible for the audit opinion.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope and timing of implementation of the planned audit, material audit findings including
material weaknesses in internal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

40
Canon Marketing Japan Inc.

AUDIT REPORT OF ACCOUNTING AUDITOR ON NON‐CONSOLIDATED FINANCIAL STATEMENTS(TRANSLATION)

Report of Independent Auditors
February 9, 2021

The Board of Directors
Canon Marketing Japan Inc.

Deloitte Touche Tohmatsu LLC
Tokyo OfficeTeruhisa Tamai
Masahiro Ide
Shinji Hatano

Certified Public Accountant
Designated and Engagement Partner
Certified Public Accountant
Designated and Engagement Partner
Certified Public Accountant
Designated and Engagement Partner

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying financial statements, which comprise the balance sheet, the statement of income, the statementof changes in net assets and the related notes, and the accompanying supplementary schedules of Canon Marketing Japan Inc. (the “Company”) for the 53rd fiscal year from January 1, 2020 throughDecember 31, 2020.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present fairly, in all material respects, the financial position of the Company as of December
31, 2020, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of the Company in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management and the Audit & Supervisory Board Members and the Audit & Supervisory Board for the Financial Statements and the Accompanying Supplementary
Schedules
Management is responsible for the preparation and fair presentation of the financial statements and the accompanying supplementary schedules in accordance 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 theaccompanying supplementary schedules that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is responsible for assessing whether it is appropriate to prepare the financial statements and theaccompanying supplementary schedules in accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible for monitoring the execution of Directors’ duties related to designing and operating the financial reporting
process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying supplementary schedules as a whole are free from material misstatement, whether
due to fraud or error, and to express an opinion on the financial statements and the accompanying supplementary schedules from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basisof the financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the financial statements and the accompanying supplementary schedules is not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of their application, as well as the reasonableness of accounting estimates made by management andthe adequacy of related notes.
・ Determine whether it is appropriate for management to prepare the financial statements and the accompanying supplementary schedules on the premise of a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If there
is a significant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes to the financial statements and the accompanying supplementary schedules
in the audit report, or if the notes to the financial statements and the accompanying supplementary schedules pertaining to the significant uncertainty are inappropriate, issue a modified opinion on
the financial statements and the accompanying supplementary schedules. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit report, depending
on future events or conditions, an entity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the financial statements and the accompanying supplementary schedules are in accordance with accounting principles generally acceptedin Japan, assess the presentation, structure, and content of the financial statements and the accompanying supplementary schedules including related notes, and whether the financial statements
and the accompanying supplementary schedules fairly present the transactions and accounting events on which they are based.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope and timing of implementation of the planned audit, material audit findings
including material weaknesses in internal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

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Canon Marketing Japan Inc.

AUDIT & SUPERVISORY BOARD’S REPORT(TRANSLATION)

Audit Report
We, Audit & Supervisory Board has discussed and prepared this Audit Report based on the audit reports prepared by each of the Audit & Supervisory Board Members pertaining to the conduct of
duties by the Directors of Canon Marketing Japan Inc. during the 53rd fiscal year from January 1, 2020 to December 31, 2020, and reports as follows.

1. Methods and Substance of Audit by Audit & Supervisory Board Members and Audit & Supervisory Board(1) We decided on the auditing policies and the allocation of work duties, etc., received a report on the auditing work performed and the results from each Audit & Supervisory Board Member, andreceived a report on the status of the work executed from the Directors and the Independent Auditor and requested their explanations as necessary.

(2) While confirming to the auditing standards as decided by us, the auditing policies and the allocation of duties, etc., each Audit & Supervisory Board Member endeavored to facilitate mutual
understanding with the Directors, the internal audit office and other employees, etc. to collect information and improve the auditing environment. Our audit procedures were as follows.

i) We attended the meetings of the Board of Directors and other important meetings, received reports on the status of the work executed from the Directors and the employees and requested
their explanations as necessary, inspected material internal decision‐making documents, etc., and investigated the status of the operations and assets of the headquarters and major businesssites. In addition, with respect to the subsidiaries, we communicated and exchanged information with the Directors and Audit & Supervisory Board Members of the subsidiaries, and received
reports on business from the subsidiaries as necessary.
ii) The following systems (Internal Control System) were determined by a Board of Directors’ resolution and designed based on this resolution. We periodically received reports from the Directors,
employees and others, requested explanations as necessary regarding the design and implementation of the Internal Control Systems, and expressed opinions on the substance of the decisions
made by the Board of Directors with regard to the Internal Control Systems.
(a) A system for ensuring that the performance of duties by the Directors complies with the applicable laws and regulations and Articles of Incorporation.
(b) A system for ensuring the Directors’ performance of the adequate operations of Canon Marketing Japan Group, which consists of the Company and its subsidiaries as stipulated under Article
100, paragraphs l and 3 of the Ordinance for Enforcement of the Companies Act.
iii)We examined the contents of the matters considered and the assessment and reasons detailed in this Business Report for the transactions with the Parent Company under Article 118 of theOrdinance for Enforcement of the Companies Act, taking into account the status of the deliberations of the Board of Directors, etc.
iv)We monitored and verified whether the independence of the Accounting Auditor was maintained and whether an appropriate audit was being undertaken, received reports from the Accounting
Auditor on the status of operations, and requested explanations as necessary. We also received reports from the Accounting Auditor stating that the necessary systems for ensuring theappropriate execution of operations (pursuant to Article 131 of the Rules of Corporate Accounting) were duly developed in line with the Quality Control Standards for Auditing (issued by theBusiness Accounting Council on October 28, 2005), and other relevant standards, and requested explanations as necessary.
Based on the above procedures, we examined the Business Report and its supplementary schedules, the non‐consolidated financial statements for the relevant fiscal year (the balance sheets, thestatements of income, the statement of changes in equity and the notes to the non‐consolidated financial statements) and their supplementary schedules as well as the consolidated financial
statements for the relevant fiscal year (the consolidated balance sheets, the consolidated statements of income, the consolidated statements of changes in equity and the notes to the consolidated
financial statements).

2. Results of Audit(1) Results of examination of the Business Report, etc.
a) In our opinion, the business report and its supplementary schedules conformity with the applicable laws and regulations of Japan and the Articles of Incorporation of the Company and fairly
present the state of the Company’s affairs;b) We have found no misconduct or material fact constituting a violation of any applicable laws and regulations of Japan or the Articles of Incorporations in connection with the Directors’
performance of their duties; andc) In our opinion, the substance of the decisions made by the Board of Directors with regard to the Internal Control Systems is appropriate. Furthermore, we found no matters that require notingwith regard to the description in the Business Report and the Directors’ performance of their duties in connection with the relevant internal control systems; andd) With respect to the transactions with the Parent Company, etc. that are described in this Business Report, we have found no matters that require noting with regard to the matters consideredby Board of Directors and the Board of Directors’ assessment and factors that might be adverse to the Company’s interests.
(2) Results of examination of the financial statements and their supplementary schedules
In our opinion, the auditing methods used and the conclusions reached by the Accounting Auditor, Deloitte Touche Tohmatsu LLC, are appropriate.
(3) Results of examination of the consolidated financial statements
In our opinion, the auditing methods used and the conclusions reached by the Independent Auditor, Deloitte Touche Tohmatsu LLC, are appropriate.

February 10, 2021

Audit & Supervisory Board, Canon Marketing Japan Inc.
Audit & Supervisory Board Member (full time)
Shinichi Inoue
Audit & Supervisory Board Member (full time)
Masatoshi Tanise
Audit & Supervisory Board Member (full time)
Iwao Hashimoto(Outside Audit & Supervisory Board Member)
Audit & Supervisory Board Member (full time)
Nobutoshi Matsumoto(Outside Audit & Supervisory Board Member)
Audit & Supervisory Board Member
Shigeo Hasegawa(Outside Audit & Supervisory Board Member)

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Canon Marketing Japan Inc.