Resolving
Social Issues
with IT Solutions

Integrated Report
16-6, Konan 2-chome, Minato-ku, Tokyo 108-8011, Japan
Canon Marketing Japan Group Website▪Investor Relations

https://cweb.canon.jp/eng/ir/

For the year ended December 31, 2021

Canon MJ Group’s Sustainability Management

Contents
Introduction

3

Value Creation of the Canon MJ Group

Based on the principle of Kyosei, we will strive to createa Company that helps realize a society in which all of
humanity can long live, work, and live happily together.

Milestones

7

Value Creation Process

9

Key Concepts in Value Creation

11

A Message from the President

13

Canon MJ Group Management Strategy

Customers
Suppliers

Employees

Public agencies,
local governments

Shareholders
and investors

Promotion ofsustainability
management

Long-Term Management Objectives (2021-2025)

19

Medium-Term Management Plan (2022-2025)

21

Financial Strategy (Financial Capital)

25

Featured Topic
Canon MJ Group’s Human Capital

27

Human Capital

31

Overview of Businesses by Segment

33

Segment Strategies
Consumers Segment

35

Enterprise Segment

37

Area Segment

39

Professional Segment

41

Featured Topic
Implementation of 2025 Vision “Professional
Corporate Group That Solves Social and Customer
Issues Using ICT and the Power of Humans”

43

Canon MJ Group’s Sustainability
Sustainability Management

45

Environment (Natural Capital)

47

Society51

Corporate Governance54

Three Way Discussion Among Outside Directors

63

Data
10-Year Consolidated Financial Summary

67

Consolidated Financial Statements

69

ESG Data

103

Corporate Data / Investor Information
Canon MJ Group105

Corporate Information

107

Corporate value sustainably increased bysolving social issues through business

NGO
NPO

Educational andresearch institutions
Local communities▪Editorial Policy▪Notation in this Report

Since fiscal 2019, the Canon MJ Group has published acomprehensive “Integrated Report” that links financial
information such as results and business strategies toThis integrated report includes the following company name abbreviations.

non-financial information previously published in CSR reports.
In the Integrated Report 2021, we introduce the Canon MJ
Group’s ability to create value over the medium to long term as
it pursues the realization of its 2025 Vision and the Canon
Group’ corporate philosophy of Kyosei. We consider thisdocument an important communication tool for deepening theunderstanding of the Group among our various stakeholders.

which people, society, and nature are in harmony and in which all human

Detailed financial information is available from the Company’s
website and securities report. The website also details
sustainability activities.

beings can live well. This is in keeping with the Sustainable Development▪Reporting Period

The Canon Group’s Kyosei corporate philosophy aims to realize a society in

Goals (SDGs). We believe that materializing Kyosei is the essence of whatmany call sustainability management. We will accordingly expand areas inwhich we can combine our Canon products and IT solutions capabilities toresolve social issues through business.

This report covers fiscal 2021, ended December 31, 2021, andalso includes activities and information before and after that
term.

▪Scope of Coverage
Canon Marketing Japan Inc. and domestic and overseas Group
companies (some information includes that of parent Canon Inc.)

1

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Group → Canon MJ Group
Canon Marketing Japan Inc. → Canon MJ
Canon IT Solutions Inc. → Canon ITS
IT solutions → ITS▪Reference Guidelines for Integrated Reports
International Integrated Reporting Framework of the International Integrated
Reporting Council (IIRC)
Ministry of Economy, Trade and Industry (METI) Guidance for Integrated
Corporate Disclosure and Company-Investor Dialogues for Collaborative
Value Creation▪Disclaimer Regarding Forward-Looking Statements
This integrated report contains forward-looking statements about theperformance and management plans of the Canon MJ Group. All forwardlooking statements are based on management’s assumptions in light of
information available to the Company at the time of publication.
The following factors may therefore influence actual results. These factors
include consumer trends in Japan as well as other major global markets,
private capital expenditures, currency fluctuations, notably against the U.S.
dollar, materials prices, and political turmoil in certain countries and regions.

Canon Marketing Japan Inc. I Integrated Report 2021

2

CanonMarketing Japan

Introduction

1968

Established

HISTORY

From

1980

Expanded the customer base
Demonstrated the trading
company capabilities

Strengthened sales channels andpromoted our own businesses

Established as a sales company to conduct businessin close proximity to the customer

Amid the expansion of the business machines market alongwith the rapid popularization of word processors and personal
computers, the Company leveraged its brand power and sales

In 1962, amid continuing rapid economic growth, Canon formulated its first five-year

capabilities developed through Canon products to form sales

management plan and made its full-fledged entry into the business machines market. In 1970,

alliances with Apple Computer Inc., IBM Japan Ltd., and Sun

Canon contributed to the expansion of the business machine and copier market in Japan with

Microsystems Japan K.K. To maintain close proximity withthe launch of NP-1100, the first plain paper copier to be made in Japan, but as competitors

customers and better respond to various needs, the Company
developed stores such as ZERO-ONE SHOP in businesssuccessively entered the market, Canon realized it needed to strengthen strategies to quickly
reflect user demands in new products.

districts and held seminars and practical classes. At the same

Established the first ZERO-ONE SHOP in 1984

time, we created sales channels for office equipment at

Canon decided to split its manufacturing and sales operations in order to conduct businesselectrical appliance retailers. Sales of inkjet printers expanded

in close proximity to the customer. Canon Business Machine Sales, Inc., established in 1968,

due to the popularization of the personal computer and wemerged as the surviving company, with Canon Business Machine Services Inc. and Canondeveloped personal office equipment as our main sales channel.

Camera Sales Co., Ltd. to form Canon Sales Co., Inc. in 1971. During the 1970s when Japan’s
economy had slowed due to the oil shock, etc., the Company was given the task of “productplanning for Japan,” “promotion and advertising,” and “business negotiations, sales and after
service” for Canon products. As the SLR camera market and business machines market
expanded, the Company steadily expanded its business.

Built the base for Systems
integrator (SIer) function
Accumulated technicalcapabilities

From

1990

Developed the systems
integration businessWe focused on the concept of the “imaging and information
systems integrator” to respond to rapid digitalization andnetwork integration, and we developed a systems integration
business that combined Canon products with third-party
hardware and software products, including those imported
directly from overseas. In addition to the manufacturer trading
company business, we promoted other original businesses,
such as a systems integrator certified in 1990 by Ministry ofInternational Trade and Industry.

Held Canon Grand Fair based on the concept of “imaging and information
systems integrator” in 1990

Inauguration ceremony of Canon Sales Co., Inc. in 1971

3

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

4

Introduction

From

2000

Strengthened humanresources and technology

Transitioned from wholesale businessto information services company
Since 2000, the Company has actively conducted M&A andpromoted business portfolio change to better respond to the

From

2021

We, the Canon Marketing Japan Group, will work tosolve the issues facing society and our customers byproviding solutions that advance people’s daily lives,work, and society.

diversifying and ever more sophisticated needs of customers.
In 2003, the Company made SUMITOMO METAL System
Solutions Co., Ltd. its subsidiary and acquired a full range ofSIer functions, mathematical technology, and R&D functions.
In 2008, the Company merged with Argo 21 Corporation andchanged its name to Canon IT Solutions Inc., and strengthened
Name changed to Canon Marketing Japan Inc. in 2006

systems integrator functions for financial institutions as SIer.
In 2006, the Company changed its name from Canon Sales Co.,
Inc. to Canon Marketing Japan, Inc. It transitioned fromwholesale business to information services company.

Evolved into an IT provider

From

2010

Expanded the IT solutions business

The Canon MJ Group’s stance of closely interacting withsociety and our customers to provide solutions to theirproblems will remain unchanged going forward.
We will leverage our customer base, brand,

The Nishi-Tokyo Data Center began operation and services totechnological capabilities, and financial base to refine

serve the growing needs of customers related to outsourcing

our functions as a trading company, a SIer, and an

and cloud services driven by the full-fledged popularization of

IT provider, in order to realize our 2025 Vision of a

IT networks and Canon Marketing Japan Group’s proprietary“professional corporate group that solves social andbusinesses were widely developed. Responding to the need forcustomer issues using ICT and the power of humans.”

small- to medium-sized enterprises to adopt IT systems, westarted operating a security business, a cloud service business,“HOME,” for small- to medium-sized enterprises, and an IT
maintenance business. In 2020, operation started at the NishiTokyo Data Center No. 2 Building, and the IT solutions business

The Nishi-Tokyo Data Center started operation in 2012.

is continuing to expand.

5

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

6

Value Creation of the Canon MJ Group

Milestones

Operating income¥

39.7
billion

The Canon MJ Group was established in 1968 to sell Canon’sbusiness machines, and later expanded beyond selling Canoncameras and business machines to offer PCs from other companies
and systems integration (SI) services. Today, the Group combines its
proprietary capabilities, diverse products, and fine-tuned services tosupply solutions that support all areas of society.

Operating margin

7.2%

Net sales

552.1

¥

billion*The figures prior to 1986 are Canon MJ’s non-consolidated figures.

1968

1970

1980

1990

1968

1971

1981

• Canon Business
Machines Sales Inc. andCanon Business Machine
Services Inc. established• Canon Business Machines Sales
Inc., Canon Business Machine
Services Inc., and Canon
Camera Sales Co., Ltd. merge toform Canon Sales Co., Inc.

• The Company lists• Forms sales alliance withon the Second
IBM Japan, Ltd., for
Section of the Tokyo
workstations and PCs
Stock Exchange1969• Canon Camera Sales Co.,
Ltd. established• Releases BP-1000 billing
processor, enters officecomputer field

1985

1983

2000

2005

2010

2015

2020

1990

2003

2006

2008

2020

• Becomes Ministry of International
Trade and Industry-certified
systems integrator• Acquires SUMITOMOMETAL System Solutions
Co., Ltd., renaming it
CANON SYSTEMSOLUTIONS INC., thus
fully entering the IT
solutions field• Canon Sales Co., Inc.
was renamed Canon
Marketing Japan Inc.

• Canon IT Solutions Inc. established• Nishi-Tokyo Data Center
No. 2 completed• Forms sales alliance with Sun
Microsystems Japan K.K.

• The Company lists on theFirst Section of the Tokyo
Stock Exchange

2007

2012

2018

• Acquires Argo 21 Corporation• Nishi-Tokyo Data Center
begins services• The Company’s 50th
anniversary• Forms sales alliance withApple Computer Inc.

IT provider function

SI function (systems integration business)

Trading company function (sale of PCs and servers of other companies)
Selling cameras and business machines

7

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

8

Value Creation of the Canon MJ Group

Value Creation Process
Canon Group Corporate Philosophy

KyoseiCanon MJ Group 2025 Vision: Professional corporate group that solves social and customer issues using ICT and the power of humans(2021 results)

Strengths of Canon MJ Group

Provide solutions that advance people’s daily lives, work, and society

Value Created

Brand

Economic value

Business Activities• High-quality Canon products•C ustomer trust amassed through years ofbusiness

IT solutions sales

221.1 billion¥

Customer base

Edge solutions sales• From large corporations to small-tomedium-sized enterprises• Consumers• Customers in specialist fields• Various and diverse partners

Technical capabilities• Approx. 4,000 systems engineers•N ationwide network of service engineers•A dvanced technologies(security-related technologies, automatedWeb app creation technologies, video andimage-related technologies, andmathematical technologies)

Consumers

EnterpriseArea¥23.0 billion

Professional

HOME, IT maintenance and operations contracts

Approx. 135,000
Deepunderstandingof customers

Individual
customers

Large
corporations,
quasi-major andupper mediumsized enterprises

Small- tomedium-sizedenterprises

Security solutions sales

Customers inspecialist fields

Staying close
to customers¥32.5 billion
IT and business process outsourcing-related sales¥21.5 billion
ROE

Uniquesolutions

Financial structure

8.2%• Robust financial base• High equity ratio

Canon product businessSocial value

IT solutions businessSupport of customers

Societal changes being focusedon by Canon MJ Group

Trading company function

SIer

Staying close to customers
Maintaining top share for Canon products

IT provider(No. 1 market share in laser printers for 30 consecutive years, etc.)

Photography class EOS Gakuen

Conserve and protect the global environment
Popularize and accelerate digitalization
Changes in the workforce
Accelerate work practice reforms

Initiatives tosupportsustainablegrowthOperating for 30 years(educating a total of 200,000 students)
Harmonious Coexistencewith the Global Environment

Improving Organizational
Capabilities to Enable Diverse
Human Resources to Thrive

Promoting Responsible
Supply Chains

Promoting Risk and Crisis
Management

Implementing Sound
Governance

In-house CO2 emission units

P.47~

P.51

P.53~

P.54

P.55~

Improved 2% year on year
(2021 target: Improving 1.2% year on year)

9

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

10

Value Creation of the Canon MJ GroupKey Concepts in Value Creation

Canon productbusiness

IT solutions
business

Social Capital

We have built our customer base over the years by selling and servicing Canon products,
forging strong relationships with partner companies. Therefore, we are able tocontinuously create value.

Broad customer segment

We provide optimal products and solutions for a broad customer
segment, encompassing large corporations to small-to-mediumsized enterprises, as well as for a variety of customers, which
includes individual customers.

We always base our thinking on the customer,
and act from the customer’s standpoint.
We take a scrupulously customer-centric approach in order to resolve the issues faced bycustomers and to provide maximum value. As a practical way of always ensuring we stay
customer centric, we follow the rule of placing the customer as the subject of our sentences.
For example, rather than making us the subject by stating “Canon will...,” we begin with
“The customer’s issues are....” By using the customers viewpoint based on the external
environment they face, we will provide solutions that can truly meet their needs in order tobring them satisfaction and put them in a superior competitive position.

Support for digitizing
paper documents
and video
Document solution
Video solution
Input devices

Alliance
partners

IT devices
Third-party software

Manufacturing
CapitalData storage

Systems
construction
services creation

Analysis results
visualization, usage,and output

Using theNishi-Tokyo
Data Center

Analysis throughmathematical anddemand forecasting
technologies

Help resolve issues forsociety and customers
by co-creation withcustomers

Development(AI and low-code development)

We will continue to support customers’ IT systems with high-performance equipment anddata centers with excellent operational quality.

The Nishi-Tokyo Data Center obtained certification for the global
standards presented on the right, which are evidence of it being ahigh-quality data center, and works to maintain this certification.
It received recognition as a Tier 4 level high-performance facility andthe M&O Stamp of Approval for meeting global standards, and complies
with the guidelines of Japan’s Center for Financial Information
Systems. We conduct drills for system failure and other trouble,
incurring no major malfunctions, in upholding high safety standards.

Human Capital

No. of SE Approx.

Obtained public certification for global standards
2016

2016

2017

2018

2019

2021

ISO/IEC
20000

M&O Stampof Approval

ISO 22301

SOC2 Type1

Near-toplevel

PCI DSS

Physical security and cybersecurity

Intellectual
Capital132(In 2021)

Business process outsourcing

Comprehensive maintenance and operations services for equipment and IT

We will hire and train people with a wealth of knowledge and experience in products and IT
to propose and provide optimal solutions at every customer contact point.

4,000

We have accumulated technology by acquiring companies with
proprietary technological capabilities and by developing advanced
technologies. Our personnel possess not only the technical abilities
but also the imagination, insight and tenacity to persevere to use
those technical abilities to find solutions for the issues faced bycustomers and society.

No. of patentapplications published

Maintenance and operations services

Canon MJ, Canon System & Support Inc., and Canon Customer
Support Inc. have a nationwide network of service sites for corporate
customers, mainly customers of office MFPs, helping establish
continuous ties with customers.

Please refer to the Company’s website for further details of our data center initiatives. ▶ http://www.canon-its.co.jp/products/idc_west_tokyo/

Total support by combining Canon products and IT solutions businesses

Canon

170 service sites throughout Japan(As of January 2022)

For more than 50 years, we have built robust relationships withnumerous customers in selling Canon products.

Customer-centric approachOver

No. of people whohave acquired the IT
Passport qualificationOver

4,700 people

We work to improve group-wide IT knowledge by supporting theacquisition of IT Passports. This support also applies to back office
departments.

By patenting the solutions technologies and supporting techniques that we have createdthrough R&D, we are building an industry-leading patent portfolio. This enables us toprovide superior customer solutions that differentiate us from the competition.

Number ofpatents held

1,187

(As of December 31, 2021)

The intellectual capital that our R&D activities generate is an
important corporate asset, so we secure the relevant patents andother intellectual property rights.

Advanced technologies
In particular, we are proceeding to aggressively acquire patent rights
in the technologies of automatic web application generation,
security-related, video and image-related, and mathematicaltechnologies, which are key strengths, and we received a Local
Commendation for Invention from the Japan Institute of Invention
and Innovation for the fourth consecutive year.
We received a commendation for invention for “personal information
filtering technology (patent no. 4823022)” which is used in our mailsecurity product “GUARDIANWALL Mail Family.”▶For details, please refer to Financial Strategy on page 25 and Natural Capital on P47.

11

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

12

Resolving Social Issues
with IT Solutions

A Message from the President

We aim to become a professional corporate group that solves
social and customer issues using ICT and the power of humans.

Masachika Adachi
President & Representative Director

A Message from the President

Value Creation of the Canon MJ Group

Theme

01

Long-Term Management Objectives (2021-2025)
Announcing the future direction of the Canon MJ Groupin a rapidly changing external environment
In April 2021, Canon Marketing Japan Group announced theforecasting is so difficult that in the Long-Term Management

Long-Term Management Objectives (2021-2025) as a new

Objectives (2021-2025) we are again focusing on the Canon

growth strategy. The environment in which we now operate isGroup corporate philosophy of Kyosei as an underpinning ofcharacterized by unprecedented and dizzying volatility, which

our corporate activities, seeking to become indispensable tois the result of climate change, the decline in the working

society and our customers, while sustainably enhancing

population, the advance of digital technology, rising

corporate value by engaging in initiatives that take society

uncertainty in the global economy, and other factors. In

and the global environment into account. In terms of ourparticular, during the spread of COVID-19 a variety ofcorporate vision, we aspire to become a professional

activities were restricted, and both society and individual

corporate group that solves social and customer issues

companies are being required to engage more fully withusing ICT and the power of humans. By solving social issues

initiatives that transcend existing frameworks in order tothrough our business activities we aim to achievetransition towards new values and lifestyles, and to address

sustainable improvements in our corporate value and toincreasingly diverse work practices. It is precisely because

move steadily forward with sustainability management.

this is an era in which changes are so dramatic and

Theme

Review of 2021
Record profits driven by growth in the IT solutions business02

and our transformation to a highly profitable structure

13

Canon Marketing Japan Inc. I Integrated Report 2021

Performance in fiscal 2021, which was the first year of thesuccess in steadily growing the core IT solutions business.

Long-Term Management Objectives, was marked by ourThis was driven mainly by SI services and by security andCanon Marketing Japan Inc. I Integrated Report 2021

14

A Message from the President

IT infrastructure-related products and services, andyears and through reductions in SG&A expenses. As aagainst the backdrop of proactive corporate investments

result, despite facing product supply constraints caused

in IT. We were also able to make progress in transformingby the semiconductor shortage and supply chain

ourselves into a company with a robust earnings structure

disruptions, we achieved record profits. This first year

through rigorous selection and concentration ofthus constituted a satisfactory start to the Long-Termbusinesses and improvements in productivity achieved by

Management Objectives.

modifications to business processes over the past few

Direction of the Medium-Term Management Plan (2022-2025)

Theme

03

Investing for growth to continuously hone the strengths of the Canon MJ Group inorder to provide DX support that meets the expectations of society and customers▪Business Strategy
We are taking steps to strengthen the IT solutions
business, which is the central driver of the Canon MJ

Group’s growth. Our high value-added solutions leverage
the strengths in Canon’s imaging technology that we havebuilt over many years, as well as in our systems

Seeking to meet customer
expectations for DX support in orderto achieve a sustainable society

15

integration, mathematical technology and otherproprietary and cutting-edge IT. By providing these to awide range of customers, from large corporations to small
and medium-sized enterprises, we will support theirdigital transformation (DX).
Over the past few years, digitization has proceeded apace
in a number of different industries. The objective ofdigitization, which replaces existing analog processes with
their digital equivalents, is primarily to enhance theefficiency and reduce the costs of existing operations. In
the Canon MJ Group, we call this approach of utilizing IT
to improve actual operational processes that support thebusiness, “defensive DX.” On the other hand, in order for acompany to increase its competitive advantage, it is vitalthat it concentrates its manpower and investment funds
on the core business and on creating new businessmodels. In addition, many customers are moving ahead topromote the SDGs (Sustainable Development Goals), andare being required to expand their business through theresolution of social issues. We call DX used for such
purposes “aggressive DX.” A company’s competitivenessis likely to be significantly affected by whether or not it
currently engages with this kind of digitalization to employ
digital technology, transform its entire business, create
new businesses, and provide new value to society andcustomers. Until now, the Canon MJ Group has primarily
practiced “defensive DX,” but going forward it will devote
more resources to addressing “aggressive DX” in order toprovide further support for customer growth, and for the
resolution of social issues.
The key concepts when seeking to strengthen “aggressive
DX” are “co-creation” and “collaborative creation.” “Cocreation” means using dialogue with the customer toclarify the business issues that they face, and creating
value together with the customer. With DX spreading andindustry boundaries disappearing, companies must create
value that is not bound by existing arrangements if they
are to retain their competitive advantages. I believe thatthrough such co-creation with customers, working
together to resolve the issues by which they are
confronted will ultimately lead to the resolution of issues
that affect society as a whole. The previously mentioned
technologies are strengths of the Canon MJ Group, andwill be indispensable for solving such problems. Moreover,in order to broaden proposals and provide even higher
added value it will be necessary to engage in“collaborative creation” that involves a variety of business
partners, including industry peers, with different
strengths. By taking business knowledge backed byexperience and derived not only from ourselves but also
from our business partners, and combining it with the
cutting-edge technologies possessed by each, we seek tocreate proposals that exceed customer demands while
being consistent with our goal of resolving social issues.

A Message from the President

Value Creation of the Canon MJ Group

By combining Canon’s imaging technology with the Canon
MJ Group’s IT solutions to perform both co-creation andcollaborative creation, we hope to resolve even more of
the issues faced by society and by our customers, and I
believe that this in turn will lead to further growth for thebusiness of the Canon MJ Group.

▪Investment Strategy
I want this organization to have the kind of presence thatencourages all kinds of customers, from large
corporations to small and medium-sized enterprises, toapproach the Canon MJ Group for advice before they go to
anybody else. It is also important to have the kind ofpresence that leads our partners in collaborative creation
to believe that they will achieve a better proposal for theircustomers by working with the Canon MJ Group. In orderto achieve the kind of presence that can meet the
expectations of both customers and partner companies,
the Canon MJ Group must further clarify and hone what it
considers to be its strengths.
To hone these strengths, the Medium-Term Management
Plan (2022-2025) calls for ¥200.0 billion in growthinvestments over the course of four years. Due to thesuccess of our past efforts to convert the Group to arobust corporate structure, we have established a systemthat can generate profit. While we must maintain thisrobust corporate structure going forward, I believe it isimportant to use investment strategy as one method toaccelerate the pace of growth in the field of IT solutions,which is a growth business. By actively pursuinginvestments while keeping risks at a tolerable level wewill aim to achieve sustainable and profitable growth.

Canon Marketing Japan Inc. I Integrated Report 2021

16

A Message from the President▪Human Resources Strategy
The Medium-Term Management Plan (2022-2025) uses
the words “contributing value through a service-based
business model” to describe the course of action we aretaking for growth in the IT solutions business. In order totransition towards a service-based business model wemust better understand the industries of which we are in
charge and the operations of more of our customers, andcreate proposals accordingly. To achieve this, we mustraise the ability of our system engineers and sales staff toconceptualize new business ideas. For internal training,
while enhancing training to learn about technology andacquire knowledge, we have put in place an educational
curriculum to foster so-called design thinking ability. In
addition to internal human development, we are actively
recruiting highly specialized individuals from outside theCompany in various fields. Incorporating high levels ofskill and diverse perspectives into the business willcontribute to the creation of new value and the growth of
the business. Our approach is that the cornerstone ofvalue creation is the power of humans. Based on this wehave designated the development of skilled personnel anurgent issue and are moving forward with measures toaddress it.

Being a Company That Is Highly Regarded, Appreciated, and Attractive

My goal is to make the Canon MJ Group a company that is
highly regarded, appreciated, and attractive.
In order to develop the kind of corporate presence thatgenerates expectations with regard to resolving
increasingly complex and diverse social issues, we musttake a multifaceted approach to matters, and have thesensitivity and sensibility to detect change swiftly. To
enable each and every employee of the Canon MJ Group to
increase their sensitivity and refine their sensibility, I wantthem to enter into dialogue with many different people,
and to come into contact with a wide range of ideas andapproaches. I always strive to listen in good faith whensomeone expresses their own thoughts to me, irrespectiveof their position or age. In addition, when listening in thisway I do my utmost to put a positive rather than a negativeinterpretation on what I am hearing.
It is slightly more than one year since I was appointed
President, and during that time the COVID-19 pandemic
has made direct communications difficult. I have regularly
communicated my thoughts and feelings to employees

17

Canon Marketing Japan Inc. I Integrated Report 2021

Theme

04

using internal social networks and the corporate intranet,and listened to feedback from a wide range of employees.
Recently there have been many more comments, including
people providing their thoughts, and an increase in theenergy level of interactions, which makes me feel thatchange is also beginning to occur within the Company.
These contain many opinions that are of value to theCompany, and have led to many realizations for me
personally.
It is important to connect with this same feeling in orderto generate a feeling of expectancy among customers andour business partners. This is conveyed to others as aform of appeal, and it is the cumulative effect of thisexpectation that leads to being appreciated. I am
convinced that an increase in employees who areperceived to be appealing and who are appreciated bythose around them will result in the appeal of Canon MJ
Group being felt by those around us, and it becoming acompany that is appreciated.

To Our Stakeholders

In order to achieve the medium- to long-term targets that
we have backcasted from our vision for the future, I havestrongly emphasized to employees in various opportunities
the need to accelerate our initiatives for reaching theseobjectives.
The recent economic environment has been characterized byconsiderable uncertainty and the outlook is difficult to read,but it is important to formulate plans and to move ahead
with them. However, if we allow ourselves to be bound tootightly by the plans that we formulated when the objectives
were first set then we will lack flexibility and fail to respondto changes. For this reason, I believe it is vital that we swiftly
begin implementing what we have decided, then makerepeated mid-course corrections as we work towards
achieving our objectives. If we close in on our targets by“accelerating,” that in itself will create a positive feeling. This
will then create the beginnings of a virtuous circle as we set
our own targets to achieve new heights, and move towards

Theme

05

A Message from the President

Value Creation of the Canon MJ Group

executing them. Seeking to complete whatever task we begin
ahead of schedule and with a “can do” attitude will generatea sense of momentum and confidence. I intend to continue
talking in various places about the importance ofaccelerating all manner of initiatives and about the sense ofachievement to be gained by setting high targets and closing
in on them. In this way, we will all, myself included,
accelerate the growth of the Canon MJ Group as a whole.

Based on the Canon Group corporate philosophy of Kyosei,
we will work alongside all our stakeholders to achieve a
global society in which all of humanity can enjoy a long life,
and work and live happily together.
I ask you to expect great things of the Canon MJ Group as we
continue accelerating towards our goal of being a company
that is highly regarded, appreciated, and attractive tocustomers and society.

My goal is for the Canon MJ Group toremain a company that is highly
regarded, appreciated, and attractive

18

Canon MJ Group Management Strategy

Long-Term Management Objectives (2021-2025)

Customers

2025 Vision
We formulated Long-Term Management Objectives (2021-2025) as a guideline for management

Suppliers

Employees

Professional corporate group thatefforts to increase corporate value sustainably. We aim to realize the Canon Group’s Kyosei

solves social and customer issues

corporate philosophy and our 2025 Vision by steadily implementing our basic strategies.

using ICT and the power of humans
Shareholders
and investors

FY2025
Targets
Basic Strategies of
The 4 Basic Policies ofthe Medium-Term Management Plan the Long-Term Management Objectives(2021-2025)(2022-2025)

FY2022
Targets

583.0 billion

Net sales ¥(of which ITS ¥235.8 billion)

41.5 billion
ROE 7.7%

Operating income ¥◦Expand IT solutions business withprofit◦Sustainably increase corporate value
by solving social issues throughbusiness◦Further increase profitability ofexisting businesses◦Strengthen specialist fields andcreate new businesses◦Group management aimed atcontinuous growth

Educational andresearch institutions

NGO
NPO

650.0 billion

Local communities

Net sales ¥(of which ITS ¥300.0 billion)

50.0 billion
ROE 8.0%

Operating income ¥◦Become a highly profitable corporategroup

We will strive to create a Company◦Create a virtuous circle by improving
management capitalthat helps realize a society in which
all of humanity can long live, work,

Note: This reflects the figures announced on April 25, 2022.
However, ITS sales figures are as of January 31, 2022.

and live happily together.
Profitability

Direction ofBusiness
Composition

Key revenue
sources

Investments infuture growth

Canon productbusiness
Specialist fields andnew businesses

Note: Size of circle indicates scale of business

2021

Public agencies,
local governments

2022

IT solutions
business

Market growth potential■ Canon product businessIT solutions business ■ Specialist fields and new businesses

2025

2050

Long-Term Management Objectives (2021-2025)

Toward 2025 and Beyond
Medium-Term Management Plan (2022-2025)

19

Canon Marketing Japan Inc. I Integrated Report 2021

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20

Canon MJ Group Management Strategy

Medium-Term Management Plan (2022-2025)
Basic
Policy2025 Vision

Professional corporate group that solves social andcustomer issues using ICT and the power of humans

1

By executing our ITS strategy by customer segment and establishing a service-based business model, we aim to expand sales
sustainably with profit.
Target Customers

Basic Policy

1

Segment

Large corporations

Expand ITS Business with Profit
Execute our ITS strategy by customer segment and establish a service-based businessmodel to expand sales sustainably while gaining profitability

2

Expand ITS Business with Profit

Enterprise
Quasi-major andupper medium-sizedenterprises

Increase Earnings Capacity of Existing Businesses
customer segment to further enhance profitability

Strengthen Specialist Fields and Create New Businesses
Promote initiatives such as further growing the industrial equipment business as a

Small- to mediumsized enterprises

specialist field, developing human resources and fostering a corporate culture to support
the innovation required to create new businesses

4(1) Edge Solutions
Sales
2021 ¥23.0 billion▼

2025 ¥45.0 billion

CAGR: +18%

Continue to strengthen the business through restructuring, and roll out strategies by

3

Solutions / Services

Area(2) HOME/IT Maintenanceand Operations
Contracts
2021 Approx. 135,000▼(3) Security
Sales
2021 ¥32.5 billion▼(4) ITO and BPO-Related
Sales
2021 ¥21.5 billion▼

CAGR: +11%

CAGR: +11%2025 ¥48.5 billion

2025 ¥32.0 billion

2025 Approx. 220,000

CAGR: +13%Group Management Aimed at Continuous GrowthEstablish an engagement improvement cycle to maximize the value of human capital, andaccelerate business investments for growth

Contributing value through service-based business model(1) Edge Solutions*
Further refine various existing strengths in the solutions business and expand areas where we have strengths. Utilizing our customer base, wewill deploy solutions created individually for major corporate customers to customers of the same industries and by turning those solutions into
services and offering them to quasi-major and upper medium-sized enterprises and small and medium-sized enterprises (SME), we will
establish service-type business models.

Targets for the Medium-Term Management Plan (2022-2025)
Medium-Term Management Plan (2022-2025)
2021 (Results)

2022 (Forecast)

Net sales(of which ITS sales)¥552.1 billion¥583.0 billion(¥221.1 billion)(¥235.8 billion)¥650.0 billion(¥300.0 billion)

Operating income¥39.7 billion¥41.5 billion¥50.0 billion

Operating margin

7.2%

7.1%

7.7%

ROE

8.2%

7.7%

8.0%

Note: Figures announced on April 25, 2022 are reflected. However, ITS sales figures are as of January 31, 2022.

21

2025 (Plan)

Canon Marketing Japan Inc. I Integrated Report 2021

* Solutions focused on areas and technologies where Canon MJ has competitive strengths (video solutions, digital document services, mathematical and demand forecasting,
low-code development, etc.)(2) HOME*/IT Maintenance and Operations
Amid the accelerating pace of digitalization, SMEs are facing shortage in in-house IT personnel, and there is a high level of customer demand
requesting assistance in addressing that. While accelerating our provision of value-added proposals that grasp the issues, needs andenvironmental changes of such SME customers, we will continue to maintain close ties with customers to expand our maintenance andoperational services.
* IT support services aimed at medium- and small-sized offices (cybersecurity measures, cloud services, etc.)(3) Security
Amid a rise in cybersecurity threats, such as targeted attacks and phishing, we will address the needs of different customer segments with total
security offerings that cover both physical security such as video surveillance and cyber security such as network intrusion detection, thus further
increasing our presence in the security market.

(4) ITO and BPO
We will continue our deep ties with customers and offer outsourcing businesses to help our customers focus on their core operations. In addition
to developing high-value-added solutions in the data center business, etc., our services offering unique operations for specific fields as an
outsourcing supplier have drastically grown into the core business in the expansion of our IT business with recurring revenue.

Canon Marketing Japan Inc. I Integrated Report 2021

22

Canon MJ Group Management Strategy

Medium-Term Management Plan (2022-2025)
Basic
Policy2

Increase Earnings Capacity of Existing Businesses

Basic
Policy3Strengthen Specialist Fields and Create New Businesses

Further Growth in the Industrial
Equipment Business

Further Increase Profitability of Main Product Businesses
Printing

CameraProvide services tailored to the needs of particular sectors/
businesses, such as centralized/dispersed printing needs arisingfrom “new normal” work practice reforms, in tandem with IT
solutions to comprehensively support entire customer work flows.

Improve profitability further by providing a product lineupthat responds to customer needs and by strengthening
relations with intermediate-level customers throughenhanced total service.

Creating New Businesses
Speed up creation of new businesses through initiatives for developing
and deploying innovative personnel with a view to creating new value
across the Group.

Keeping abreast of the world’s latest technologicaltrends, we are researching and pioneering excellent
products overseas. Also, we will expand the size of ourbusiness through importing and selling various anddiverse original merchandise, and having our highly
specialist personnel provide maintenance and support.

Internal businesscreation program(Canon i Program)Business development utilizing strengths
Offices in specialist fields

Home use

Printing services tailored to
the needs of particularsectors/businesses

Canon productbusiness

Focus onintermediatelevel
customers

General offices

Digital document
services

Products that
respond to
customerneeds

Enhancedservice

Digitalwork flow

Suppliers

Diversified needs

Various needs

Innovation
AcademyAttain higher
profitability

ITS business

Planning

Basic
Policy4

Sales

Installation

Maintenanceetc.

Increasing the value provided to customers through improving personnel skills will lead to a sense of fulfillment in serving customers
as well as motivation for growth, and in turn will establish an engagement improvement cycle, which is a virtuous cycle.

Segment

Professional corporate group that solves social and customer issues using ICT and the power of humans

Strategy

Realization of vision
Increasein valueprovided

Development of skilled personnel•U se customer base to expand sector-specific and operational-specificprojects

Enterprise

Small- to mediumsized enterprises• Capture new document needs generated by the diversification of offices
under the COVID-19 pandemic•A cquire new quasi-major and upper-medium-sized customers toachieve business enlargement

Quasi-major andupper medium-sizedenterprises

Program for acquiring art
thinking, design thinking,and task-setting skills

Group Management Aimed at Continuous Growth

We will leverage the customer-based organizational structure to accurately capture needs for each customer segment and quickly
execute strategies.

Large corporations

Rank-specificinnovation
training

Establish an Engagement Improvement Cycle

Analysis

Execute Strategies Tailored to Customer Segment

Target Customers

Work for creating ideas
through the use of art
thinking and design
thinking

Satellites
Unearthing

Create new
businesses

Innovation skills measurement

Canon MJ Group (Platformer)

Accumulationof dataBusinessdocument
solutionsCustomers

Internal business creation program that encourages
employees to practice business creation

Motivation
for growth

Customer satisfaction

Engagement Improvement Cycle

Rewardingsense ofcontribution

Employee job satisfaction• Strengthen salesforce through reorganization

Area• Strengthen and intensify area marketing• Reassess business processes to improve productivity

Speed Up Business Investments for GrowthBusiness investments will reflect capital efficiency and profitability goals. We will reinvest profits from these investments in growth businesses.
▶For details, please refer to Financial Strategy on page 25.

23

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24

Canon MJ Group Management Strategy

Financial Strategy (Financial Capital)
While keeping sustainability management in mind, we will forge aheadin future will be the speed and decisiveness with which we

The breakdown consists of investments in the business, such

shift to a highly profitable service-based business model.

as M&A and equity investments, as well as investments inwith improving capital efficiency and investing for continuous growth.

Another 2025 management indicator target is that of ¥50.0

systems and human resources. In addition to making

billion in operating income. We recognize that in order toinvestment contribute to performance during the period up

achieve both our targets for ROE and operating income, weto 2025, we believe that investments necessary to enable thewill need to stretch our current business model to its

Canon MJ Group to achieve continuous growth to 2030 andmaximum extent.

2050 need to be in this four-year period. Investments forAchieving Record Profits Despite aDifficult Business Environment
I feel that 2021 was a year in which we dealt with one change
in the environment after another, while the COVID-19
pandemic went on around us. We in the Canon MJ Group
were especially conscious of the need to think several steps

continuous growth will not consist of equal amounts every[Investing for Continuous Growth]year, and we will execute them while maintaining financial

As a result of transforming our previous corporate structure

discipline and appropriately managing our financial andwe have succeeded in raising our ability to generate cash.

capital strategies. We will also enhance returns to

The Medium-Term Management Plan (2022-2025) calls forshareholders as we work on improving corporate value.

investing more than ¥200.0 billion in growth over four years.

ahead and come up with ideas to achieve both what weneeded to do and what we were able to do. As a result weturned in an excellent performance, with profits hitting
record highs and all business segments growing year on

Shareholder returns
2022-2025

Growth investments¥

Over the past few years, I think the Canon MJ Group has

200.0 billion
or moresucceeded in achieving a lean financial structure that can
Required cash
and deposits

expansion of profits, flooring the accelerator as we pursue
the operating income target of ¥50.0 billion in 2025.

business efficiently by taking existing systems that we mainly
built together with specific large corporations, and rollingthem out to customers in the same industry, then to quasimajor and upper medium-sized enterprises, and thensmall-to-medium-sized enterprises.

Basic Policy on Financial Strategy
The key points of our financial strategy are improving capitalefficiency and investing for continuous growth.
[Improving Capital Efficiency]

Tsuyoshi Osato

The 2025 management indicator targets that were set in the

Director, Vice President
In charge of Group Auditing, Group Finance &Accounting and Group Procurement
Chief Executive of Finance & Accounting Headquarters

Long-Term Management Objectives include ROE of 8.0%,

M&A and investments
Systems investments
Human resources investments

Maintain an appropriate level of cash and deposits in handthat takes response to emergency situations into consideration

Financial Discipline and Sustainability Management[Financial Discipline]
To date, the Canon MJ Group has consistently taken aproactive approach to investments for growth, such as M&A.
Over the past few years we have not conducted any major
M&A, but during that period we reassessed SG&A expenses
and our sales style, changing to a leaner corporate structurethat I believe can generate profit even in a harsh social
environment.
When investing, if we can properly identify investment
targets in the Group’s priority areas and the deals meet thecost of capital, we will commit the necessary funds.

finance, and with regard to climate change in particular, inJanuary 2022 we formulated and announced the Canon MJ
Group Environmental Vision 2050 and the Canon MJ Group
2030 Medium-Term Environmental Targets. In order toincrease the effectiveness of that Vision and the intermediatetargets, we endorsed the recommendations of the Task
Force on Climate-related Financial Disclosure (TCFD) andare working on related initiatives.
The Canon MJ Group plans to conduct investment in data
centers as well, with the keyword for data centers being CO2.
As we transition to a service-based business model,
customers are shifting their services from their own
premises to the cloud and to data centers provided by thefinancial discipline. We have a committee that deliberates

Canon MJ Group, and this contributes to reductions in CO2

the appropriateness of loans, investments and M&A, andemissions by customers. Our data centers operate at highonly after being discussed by that committee are items

efficiency and have low energy consumption, and bysubmitted to the Board of Directors.

converting them to use renewable energy we can further

our own funds to grow sales, raise our earnings power, and[Sustainability Management]

reduce customers’ CO2 emissions, and in turn help reduce

improve capital efficiency. The driver of ROE improvements

Sustainability issues are having an increasing impact on

and we have already exceeded that level with the 8.2% werecorded in 2021. Going forward we will focus on maintaining
ratio of 71.0% we have a robust financial base. We intend tomaintain this healthy financial structure while committing

Canon Marketing Japan Inc. I Integrated Report 2021

• Promoting DX business• Edge solutions• Data centers• Security, etc.

On the other hand, the prerequisite is that we maintaina level of at least 8.0%, but with a total stockholders’ equity

25

Priority
areas

Generate earnings and reinvest in growth businesses

What we are most focused on is the shift to a service-based
business model. In the area of IT solutions, we will grow the

ITS business growth

Creating new businesses

Cashgenerate solid profits. In 2022 we are aiming for a further

Investment details

Investment areas

Operatingcash flows

year on an operating income basis.

Maintain stable dividends based on a consolidated payout ratio of 30%

CO2 emissions for society as a whole.

Canon Marketing Japan Inc. I Integrated Report 2021

26

Canon MJ Group Management Strategy
Featured Topic
Canon MJ Group’s

Human Capitalsystem of permanent employment, but this has been

what kind of value they can generate in what areas, anddiscussed as a bad custom when compared to systems ofnecessary to manage and utilize data in a quantifiable

employment in Western companies. However, personnel

manner. By visualizing this, I believe that employees willtraining, etc. from a medium- to long-term standpoint, whichnotice the capabilities they need to improve in the future,

has been treated as very important by Japanese companies

which will create a culture where they study of their own

thus far, has aspects that are compatible with this concept ofvolition.

human capital, so we are reviewing it. In the age we areentering, I believe that our source of corporate
competitiveness will be our understanding of personnel ascapital, which will lead to an increase in the value of
personnel and increase of corporate value.

Takashi Iwamoto

Masachika Adachi

Minoru Mizoguchi

ISO 30414 External Leading Consultant/Assessor, HC
Produce Inc.
Project Professor, Graduate School of Business
Administration, Keio University

President & Representative Director

Director, Senior Vice President
In charge of Group General Administration & Human
Resources Management, Group Legal and Intellectual
Property, and Group Logistics
Group Executive of General Administration & Human
Resources Management Headquarters
General Manager of Secretarial Office

Accelerating the development of skilled personnel to use ICT
and the power of humans to solve social and customer issues
Canon MJ Group is promoting the development of skilled personnel.
We invited Project Professor Takashi Iwamoto from Keio University and exchanged views on the theme of “human capital.”

Approaches to Human Capital
Please tell us your opinion on the different approaches to human capital.

human capital is still in its early days. The first thing weshould do is make solid advancements in personnel
assessment, so that we express things like, “Our Group has
this many members of personnel with the necessary skills to

At the same time, I see enormous benefits from initiatives torealize our vision,” by using a common language such as avisualize value of human capital through something like a“personnel balance sheet.” I get a strong impression from“personnel balance sheet” as Dr. Iwamoto mentioned. In

this conversation that such a thing would be the best way toevaluating the capability of employees in the Group, I often

give all our stakeholders an accurate understanding of thehear reports stating, “that person is a very capable memberGroup’s value while at the same time improving motivationof personnel,” but I believe that it is important to visualize

among each of our employees.

Canon MJ Group’s Human Capital
How does Canon MJ Group view its personnel?
Mizoguchi: Considering the two terms “human capital” andviews on personnel skills development considerably.

“human resources” mentioned earlier by Dr. Iwamoto fromCurrently, we have stated as our 2025 Vision that our Groupthe perspective of a human resources officer, I would say

aims to become a “professional corporate group that solves

that within the Canon Group, we carry out corporatesocial and customer issues using ICT and the power ofmanagement and human resources policy with the basic

humans,” and have been working on this vision. The “powerview of our personnel as “human capital.” In the Canon MJ

of humans” is an indispensable element for continuing toGroup as well, I think that since long ago, we havecapture customers’ trust. As they have thus far, theperpetuated the viewpoint that it is our personnel who arenecessary know-how, knowledge and capabilities change as

the source of our corporate competitiveness, and President

business categories change. Our Group must constantly

Adachi is constantly telling our employees and officers thatchange into a company that has many personnel who can be“people are everything.”

recognized by our customers as providing added value. That

Iwamoto: The expression “human capital” has actually been

Management Applications,” and these systems have beenaround for a long time. In the 18th century, Adam Smith was

evolving rapidly since the 2010s as AI has advanced. Throughalready stressing the importance of human capital, and the

managing human capital by using data in this way,

As a way of illustrating the special attributes that ourterm has been the subject of debate for close to 250 years.

managements are already beginning to reap returns. You

personnel of the Canon MJ Group possess, allow me to tell

We also use the term “human resources.” But the word

never know, perhaps in the future, companies will be

you about the results of the external assessments from the“resources” is a concept that tends to be understood inpresenting “personnel balance sheets” alongside theirother day. From the standpoint of the external evaluator, theAdachi: I am keenly aware of the need to further train

terms of consumption, like in energy resources, or as a cost.

financial balance sheets in their reporting.

employees of the Group were rated highly for “showing apersonnel to have high levels of creativity. As we movestrong resolve to successfully tackle issues, regardless of

toward achieving the Long-Term Management Objectives

the targets.” However, at the same time, the evaluator(2021-2025), we must further put our effort into humanpointed out that they “have room to grow with regard tocapital management. As I mentioned just earlier in response

creativity, which includes making future projections

to Dr. Iwamoto’s opinion, initiatives aimed at visualization ofthemselves and the capability to conceptualize freely.”

the value of human capital is very important. Meanwhile, I

On the other hand, “human capital” conjures the image ofsomething akin to financial capital that can yield returns
through investment. Understanding personnel as “capital”
like something similar to financial capital gets to the heart ofthe philosophy of human capital management.
In the global realm, HR systems are called “Human Capital

27

Furthermore, I think that information disclosure regarding

Canon Marketing Japan Inc. I Integrated Report 2021

Adachi: The concepts you are talking about here are easy tounderstand.In the world of accounting, the main stream ofthought is to comprehend personnel as costs due to theexpression “personnel expenses,” and they are understoodas the target for cost reductions in corporate restructuring
plans, etc. Moreover, Japan has long been known to follow a

Now we operate in an era in which we need to transform ourtype of personnel is what we mean when we refer to the“development of skilled personnel” in our Long-Term
Management Objectives (2021-2025).

believe there are some aspects of the value of personnel that

Canon Marketing Japan Inc. I Integrated Report 2021

28

Canon MJ Group Management Strategy
Featured Topic

Canon MJ Group’s

Human Capitalcannot be measured using a uniform yardstick. It is

Group on Improvement of Sustainable Corporate Value andorganizational productivity increases or organizational

younger and mid-level employees we talk about wanting

important that we boost the value of personnel while being

Human Capital” by the Ministry of Economy, Trade andimprovement, it is necessary to set action plans andthem to “set high targets for themselves and think aboutaware of that point. While utilizing the unique strengths that

Industry, which suggests that “diversity and inclusion ofaddress the issues on an ongoing basis. With the

how to climb that mountain to reach the peak.” I think thateach individual possesses, we need to refer to and match up

knowledge and experiences” is essential.

advancement of ICT, etc., there are tools available that we

it is okay that people have different ways of climbing to thecall “action platforms,” which allow for accumulation of thepeak. Just accumulating many experiences of success isbehavioral data of employees and increased precision of

not necessarily good as there are many things to learn fromaction plans while rotating PDCA cycles. Using this type ofexperiences of failure, which leads to growth. Our message

By interacting with customers in a highly sensitive andIwamoto: Important aspects include the personalities,

platform, we will accumulate action data and be able to put

to employees is that we want them to take on newsensible manner, we can shrewdly make proposals thatcompetencies (behavioral characteristics that give rise to

it to good use.

challenges over and over without questioning if it’s adifferentiate us with a standpoint that differs from that of aaccomplishments), styles of thought, and the like that eachmajor system integrator, which I believe will lead to theemployee holds constitute a big point.I think that what ends

improvement of customer satisfaction.

up being created is the result of an overlaying and mixing ofwith common global yardsticks. In addition to this,“sensitivity” and “sensibility” that perceive a complex anddiverse society as well as customers’ issues are essential.

Iwamoto: I am quite taken by the terms “sensitivity” and“sensibility.” A major theme of research across the globe is
the question: “How do you create corporate culture?” Withinsuch discussion, the importance of cognitive diversity issometimes emphasized. It is an approach that places utmost
importance on giving weight to such aspects as diversestyles of thought, sensibility, sensitivity, and experience, andcreating an innovative corporate climate through such a mix.
This way of thinking can be seen in the “Report of the Study

Adachi: What is important for increasing sensitivity andrefining sensibility?

various elements, such as knowledge and skill based on
biological capabilities and experience. However, it is not easy
to apply such result to business. However, if we practice astyle of management that keeps “cognitive diversity” in mind,
I think the attitudes of employees begin to change, and wewill gradually see the Group transform into an innovative
organization. Although it won’t be possible to makeFor example, it is necessary for managers to improve theirskills in order to promote the growth of their team beneath.
If a manager is able to improve his/her management skills

success or failure. I believe that sensitivity and sensibility
can be refined and business conceptualization skills will becultivated through this process of taking on challenges.

based on the hints of accumulated action data, this would

As a result, the value of proposals to customers willlead to reductions in training costs while boosting

increase, and we will in return gain a higher level ofproductivity. Within leading-edge companies, the use of

expectation from customers. Increasing customer

such action platforms is becoming increasingly popular.

satisfaction leads to job satisfaction and makes life more

Through combining human wisdom with ICT, the tools usedrewarding. The pursuit of customer satisfaction results in

to improve engagement are rapidly evolving.

employee growth, which leads to company growth andquantifiable measurements of these new management

Mizoguchi: It is certainly welcome news that such tools

initiatives, I think we will see such things get translated into

become available.In today’s age, I don’t think we need abusiness achievements.

unilateral pressure on employees to feel loyal to theircompany, and at the same time, I don’t think companies

ultimately boosts the Canon MJ Group brand. This virtuous
cycle is very much the “engagement improvement cycle” set
forth in the Medium-Term Management Plan (2022-2025),
and I think it encapsulates true engagement.

should only pursue employee satisfaction. True

Improving Employee Engagement

engagement requires a relationship of equality. I think

On the subject of employee engagement, how should we consider this issue going forward?

individual growth, success at work and the Company’s
growth are things that need to occur in synchrony with eachother. Another important factor for us is customer

Iwamoto: Actual tools for measuring engagement, such as

have already been in use two or three decades. However, I

satisfaction. Therefore, it is important that customer

organizational analysis and employee satisfaction surveys,

think that in order to translate such results into concrete

satisfaction creates a flow that leads to employee growthProfessional corporate group thatsolves social and customer issues
using ICT and the power of humans

and then to company growth. In these times where there is
the pressure of the great transformation of our businessRealization of visionmodel, if we think about what kind of value we can provide
to customers, I think that the thing we need to do will
inevitably come up.

Developmentof skilled
personnel

Increasein valueprovided

Customersatisfaction

Adachi: The “development of skilled personnel” is anextremely important element for realizing “Expand ITSEngagement
Improvement Cycle

business with profit,” which is one of the basic policies in
the Medium-Term Management Plan (2022-2025).We will
not only be conscious of increasing the level of IT-related
knowledge, but also increasing capabilities in areas ofsensibility, such as design thinking and businessconceptualization skills. To do this, it is essential to take on

Rewardingsense ofcontribution

Motivation
for growth

Employee job
satisfaction

new challenges.
Our message for newly joined employees is “do not focus
solely on just what you are told to do,” while with our

29

Canon Marketing Japan Inc. I Integrated Report 2021

*For details, please refer to Medium-Term Management Plan (2022-2025), Basic
Policy 4: Group Management Aimed at Continuous Growth on page 24.

Canon Marketing Japan Inc. I Integrated Report 2021

30

Canon MJ Group Management Strategy

Human Capital
The ideal form of personnel

Preparing to Execute the IT Solutions Strategy“Professional human resources who demonstrate enterprising
nature and continue to be selected for their new value creation”
1. Based on the spirit of the “Three Selfs” that constitutes the Canon Code of Conduct, we create learning
environments in which participants can study with a sense of ownership.

Policy ofdeveloping
human
resources

2. We clarify the gap between aspiration and reality, and design steps to close that distance.
3. As foundation of learning, we require our people to think issues through to the end, and to think their
way to solutions.
4. Taking the basic approach that people are trained through experience, we create not only spaces fortraining but opportunities to take on real-world challenges.
5. By respecting and sometimes questioning the opinions of others, we create an environment in which weteach and are taught, educate and are educated.

Targeted Changes in Behavior
Based on the spirit of the “Three Selfs” that constitutes the Canon Code of Conduct, we will continue
to learn of our own accord, utilize the knowledge we have developed to take on new challenges, andin doing so create change (or change ourselves). By repeating this process, we aim to achieve growth.

Education and Training
The Canon MJ Group conducts foundational training that is common for all roles, and training for increasing expertise in each field anddeveloping personnel who can lead their departments.

▪ Basic Training
The basic training that has been standardized for all roles is conductedusing rank-specific training based on the personnel training system thatdefines “the ability to think, the ability to execute, and the ability to involveother people” in levels. The aim is for participants to study theories
during the training and learn by putting those theories into practiceduring their work. Furthermore, we are expanding career training,training to develop design thinking, etc. and enhancing the curriculum.
In addition, we have a variety of available options, including a system forsupporting the acquisition of qualifications, self-selected distanceeducation and e-learning, to foster a culture of learning and support
individual development.

▪ Case (1): Developing Solutions Specialists in the MA Headquarters
A solutions specialist in the MA Headquarters (Enterprise segment),
which is one of the roles at Canon MJ, has the knowledge and knowhow necessary to provide IT solutions mainly for large corporations,working closely with customers to develop plans centered on IT
solutions that will resolve the issues facing the customers.
The solutions specialist especially strives to hone their solution
planning skill and business conceptualizing skill in order tostrengthen their skills for conceptualizing and building business IT
based on social issues and technological innovation while considering
the growth strategy of the customers. The Company has created the“Defining the Ideal SS” document and skill assessment system andCanon IT Solutions has created the business co-creation model and the service creation model to realize the co-creating company as statedin its VISION 2025, and is working to develop the human capital that holds the key to achieving these models, namely, consultants, andpersonnel who can create service concepts.

[Co-creation School: Business Co-creation Course][Co-creation School: Service Creation Course]

The Co-creation School is a practical personnel development organization
for human resources who will play a central role in the co-creating company.
In the Business Co-creation Course, issues facing customers are identified
and good hypothetical solutions are developed in order to foster the ability topropose measures for solving issues. The first half of the one-year training
period is the “learning phase” where, in 2022, participants are gaining basic
knowledge regarding management, studying to acquire small and medium
enterprise management consultant certification, etc. while learning
problem-solving methods, and working on writing white papers on themes
they selected. Participants who have successfully completed the learning
phase, proceed to the “practical phase” in the second half of the training
period where they build up experience in actual projects (including multiple
discussions with client management in extremely high upstream areas) at
the Business Innovation Promotion Center.

In the Service Creation Course, social issues and problems are identified,
new services and business ideas are examined and the participants’ability to give shape to ideas and launch businesses is fostered in order tocreate service-based businesses. The training is conducted as project
research (approximately eight months) at The Graduate School of Project
Design (Professional Graduate School). The participants attend lectures
given by a wide variety of lecturers, including external guest speakers,
and hold discussions among themselves using the points they noticed
and knowledge they acquired from the lectures in order to firmly
establish the ability necessary for creating business concepts. Finally,each participant creates a concept plan for a service business.

▪ Recruitment of IT Personnel
Specialty

SkillsSelected training

Specialist
training for
eachdepartment

Common business skills and IT basic skills training

As part of the shift to the IT solutions business, the proportion of systems
engineers among new graduates and midcareer hires rises year by year. Without
being limited to persons with a science-based education, we hire those with abackground with IT skills or those who have a strong interest, and make efforts todevelop them internally.
In addition, we actively hire highly specialized personnel from outside the Company
for important positions. Bringing a high level of skills and various perspectives into
the business contributes to the creation of new value and business expansion.

Proportion of systems engineers in
new graduates and midcareer hires
(%)
60
50
40
30

32

39

41

Mar. 2019

Mar. 2020

47

52

20
10
0

Mar. 2018

Mar. 2021

Mar. 2022

Basic

Value Creation Process

Message from the Head of Personnel Training and Recruitment
Meritocracy, which is one of our action guidelines, is a concept in which people who work independently are rewarded

For the specialist training, we are working on creating skill definitions for each department. We avoid overlapping investment byclearly separating the roles of specialist training and basic training, and have achieved a flexible program.
For the development of human resources for management, without focusing solely on acquiring knowledge related to
management, we aim for diverse perspectives and flexible ways of thinking by adding liberal arts, and implement initiatives torefine our sensitivity and sensibility.
Going forward, we will make even greater efforts in specialist training related to digital literacy, and accelerate the developmentof skilled personnel.
Canon Marketing Japan Inc. I Integrated Report 2021

The Company is carrying out multifaceted activities to ensure that theskills firmly take root through group work, classroom learning,presentations, feedback, etc., with an emphasis on putting the skills
into practice, including the “DX Human Resources Development
School” for learning methods and processes for creating new
business models, the “Design Thinking Workshop” for learning theentire “design thinking” process and experiencing putting it into
practice, and the “New Solution Workshop” for putting the processfrom “shared feelings,” which are particularly important even within“design thinking,” to “defining the problem” into practice.

▪ Case (2): Developing Highly Skilled Human Resources at Canon IT Solutions▪ Specialist Training

31

conducts practical training to develop highly skilled human resources.

fairly and properly. We do not discriminate based on gender, as well as age, educational background and career history.
Employees are evaluated fairly and impartially based on the results of their work and their awareness and conduct withrespect to their work. While we continue to value this unchanging concept, uncertainty in the global economy is

Wakana Saiki
General Manager of Group
Human Resources Development
Center of General Administration& Human Resources
Management Headquarters

increasing and, as digital technology advances, the necessary skills and literacy are constantly changing together withchanges in the external environment. By responding flexibly and quickly to such changes, including honing oursensitivity and sensibility to trends around the world and the subtle differences in our customers, we aim to make theCanon MJ Group a place where diverse human resources can feel invigorated and thrive.

Canon Marketing Japan Inc. I Integrated Report 2021

32

Canon MJ Group Management Strategy

Overview of Businesses by Segment
We are developing businesses in the Consumers, Enterprise, Area, and Professional segments to help numerous customers create value.

Customers

Individuals

Large corporations, quasi-major andupper medium-sized enterprises

Small- to medium-sized enterprises

Specialist fields

Segment

Consumers

Enterprise

Area

Professional

We sell cameras, a product manufactured

For large corporations, quasi-major andWe provide Canon products and IT solutions

since the time of our founding, Canon

upper medium-sized enterprises, weto the small and medium-sized enterprises

products such as inkjet printers, and otherprovide Canon products and IT solutionsof Japan by fully leveraging our diverse

non-Canon IT products, to corporate clientsthat help resolve industry-specific issues.

channels made up of our business partners,

and individual customers.

We provide specialist solutions.
• Production printing• Industrial equipment• Healthcare

system partners and direct sales.

Business Process Outsourcing

MarketingService & Support
Group Headquarters

Consolidated Sales by Segment552.1 billion¥

129.5 billion

Consumers ¥Enterprise ¥190.6 billion

39.7 billion

13.6 billion

Consumers ¥31.5 billion

Professional ¥2.5 billion

220.8 billion

Area ¥

Consolidated Operating Income by Segment¥

Professional ¥13.9 billion

Enterprise ¥Area ¥

12.0 billion

Note: In addition to the above, there were net sales of ¥(20.3) billion and operating income of ¥(2.3) billion in the “Other” segment for the call center and BPO service business and elimination of inter-segment transactions.

33

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

34

CONSUMERS

Canon MJ Group Management Strategy

Segment Strategies

Consumers Segment

Overview of the year ended December 31, 2021
Segment sales and operating income (Billions of yen)

We sell cameras, a product manufactured since the time of our■■ Net sales

Koichi Mikami

founding, Canon products such as inkjet printers, and otherVice President
Director of Consumers Segment

non-Canon IT products to corporate and individual consumers.

129.5
Sales ratio bysegment

23%

MissionShare information of 2021

Operating income

13.6

2021
(Results)

131.3

12.8

2022
(Forecast)

127.5

10.5

2025
(Plan)* Reflects the figures announced on April 25, 2022.

Digitalinterchangeablelens cameras

Inkjetprinters

37%

43%

1

2nd placest placefor 14 consecutive years

Make consumers’ lives more fulfilling and convenient through the products and services
that we provide, under an organizational culture, resilient and flexible in the face ofchange, that has been developed through marketing activities for the Canon products
Photography and Video Initiatives
Business Strategies
For the consumer market, which is characterized by rapid technologicalinnovation and significant changes in trends, we aim to provide value thatexceeds our customers’ expectations. Our strengths are customer trustin our cameras and printers, which are the most distinctive part of theCanon brand, and diverse points of contact with customers, fromretailers to e-commerce and our own showrooms (Canon Photo House).
We will strengthen our points of contacts in the digital and real worlds
and engage in more meaningful communication in order to provide evenmore value.

photo circles and camera classes to provide customers with places toexchange ideas and receive rich support while striving to provide added
value based on photographers’ subject matter. In the future as well, we
will continue to support national photography contests (such as Shashin
Koshien) and the like to promote the charm and value of photos and help
provide opportunities that foster creativity and sensibility among young
photography enthusiasts. In such ways, we will make the lifestyles of ourcustomers more fulfilling and contribute to the development of aphotography culture.

Although the camera market is mature, we expect that consumer
demand will gradually grow as the number of opportunities for travel,
going out, etc. increases in the future. Through developing our original
services that provide support to a wide range of camera users from theprofessional to the entry level user, we have gained a deeper
understanding of our customers, and we are further enhancing activities
to continue such ties with them. In particular, to further strengthen ties
with customers with a strong interest in photography, we are promoting

For inkjet printers and IT products, we offer usage proposals and newexperiences for working styles and learning brought about by the newnormal in order to improve convenience and productivity for customers.
While striving to further enhance profitability of cameras, printers, andother existing businesses by strengthening our connections to consumers,
we aim to exceed the planned targets for sales and operating income byendeavoring to create new products and services for the years ahead.

2021 Performance Topics
Segment
overall

35

Sales ⬆

Expansion of marketing of priority products such as middle- and high-end mirrorlesscameras and RF interchangeable lenses
Increase in sales due to higher sales of inkjet printers and IT products

Operatingincome ⬆

Increase due to an increase in gross profit from higher sales of high-value-added products
and due to lower SG&A expenses

Sales ⬆ Digital interchangeable lens cameras

Sales ⬆ Inkjet printers

Significant increase due to strong sales of high-priced
mirrorless cameras such as full-frame sensor EOS R cameras,
RF interchangeable lenses, etc.

Increase due to an increase in the composition of high-valueadded products and a rise in sales of products equipped with
the GIGA TANK, an extra-large capacity tank

Sales ⬇ Ink cartridges

Sales ⬆ IT products

Decrease due to a shrinking market caused by factors such asa decline in color printing

Increase due to a rise in sales of PC peripherals and gaming
PCs

Canon Marketing Japan Inc. I Integrated Report 2021

By supporting repairs and cleaning at Canon booths of the photographic
equipment used during international sporting events held in the summerof 2021, we enabled professional photographers from around the world tocover events without hindrance, helping them deliver photos and footage ofinspirational moments by the athletes.

Provides lenses for TV stations and production facilities, weather cameras, commercial video equipment, and cinematic cameras
and lenses for professional video creators. With even still cameras now being required to provide high-quality video functions, weseek to generate synergies by using BtoB imaging technology based on Canon technology to heighten the appeal of video functionsof BtoC products. The EOS R5C launched in March 2022 has been well received by video creators.

Initiatives for Creating New Customers
 e are expanding the business of distributing merchandise of both domestic and overseas manufacturers using the logistics,
Wsales channels, and marketing capabilities of Canon products. In particular, we focus on finding products that can provide newvalue for consumers from overseas manufacturers that are not yet active in Japan, developing the business through win-win
relationships.

ichikara Lab teammembers (above)ichikara Lab space(below)

We are also actively working on the creation of
new products originating in the Consumers
segment. At the ichikara Lab, our first in-housestartup, we are making efforts to strengthen ourmarketing to younger consumers while
simultaneously reaching out to new customer
segments. In addition, we are launching projects
to generate new businesses, and working tocreate products and services that could only beachieved by ourselves by virtue of our closenessto customers, and to train our own personnel.

Canon Marketing Japan Inc. I Integrated Report 2021

36

E NTE RPRISE

Canon MJ Group Management Strategy

Segment Strategies

Enterprise Segment

Overview of the year ended December 31, 2021
Segment sales and operating income (Billions of yen)

For large corporations, quasi-major and upper medium-sized■■ Net sales

Hiroyuki Matsumotoenterprises, we supply Canon products and solutions that help

Vice President
Director of Enterprise Segment

resolve industry-specific issues.

Edge solutions sales

249.0

¥

45.0 billion

20.0

Sales ratio bysegment

190.6

33%

MissionOperating income

198.0
¥

13.9

14.0

2021
(Results)

2022(Forecast)

2025(Plan)

18.0 billion¥

23.0 billion

2020(Results)

2021(Results)

2025(Target)* Reflects the figures announced on April 25, 2022.

Become a true partner by collaborating with our customers to create value
Business Strategies
We aim to realize a sustainable society by finding solutions throughco-creation with customers.
By using the relationships we have already built up with customers
over many years, we have been able to gain deeper understanding of
our customers’ industries and the content of their business. Moreover,by employing the original technology related to imaging and AI held byCanon, and the original technology related to software, mathematics,
language processing, image analysis held by Canon IT Solutions, andso forth, we are able to offer solutions that other companies are unable
to provide. Our combined capabilities, which allow us to provide
proposals, development, maintenance, and operations in our fields ofexpertise backed by such technologies, are our strength.
Amid the progression of digitalization and the saturation of supply inexisting markets, major corporations and other companies are
increasingly conducting initiatives based on open innovation to obtaininsightful input from external parties in order to shift the businessstructure.

Seamlessly continuing efforts to deeply understand the industry andthe business of our customers, we would like to co-create new value
with our customers through further honing our knowledge andoriginal technological capabilities and holding extensive dialogue withcustomers.
In order to further promote such customer co-creation businessmodels in the future, we will strive to identify our customer’s
problems and nurture and encourage the design concepts thatemerge. In addition, through upskilling and hiring activities, targeting
data scientists and high-caliber IT personnel capable of carrying out
large projects, we will also further hone our application research andproposal and development capabilities. With the aim of contributing
to society through finding solutions for society and our customers inorder to boost existing value in the market and industry, we areaspiring to become a “true partner” that customers look to first for
advice.

2021 Performance Topics
Segment
overall

37

Sales ⬆

Increase due to the strong performance of the IT solutions business despite a decreasein sales of mainstay business equipment resulting from the impact of supply shortages

Operatingincome ⬆

Increase due to a rise in gross margin from higher sales and due to efforts made to cut
SG&A expenses

Sales ⬇ Office MFPs and laser printers

Sales ⬆ Ink cartridges for laser printers

Decrease due to the impact of product supply shortages

Increase due to sales growth primarily in the financial sector

Sales ⬇ Maintenance services

Sales ⬆ IT solutions

Decrease due to a decline in print volume in offices as major
corporations continued their teleworking initiatives

Increase due to solid performance for SI projects for thefinancial sector, projects to meet the digitalization needs of theeducational industry, the second data center building andsecurity projects, as well as several BPO projects, etc.

Canon Marketing Japan Inc. I Integrated Report 2021

Akira Kanazawa

Canon IT Solutions Inc.

President
Canon IT Solutions Inc.

Position within the Canon MJ GroupVISION 2025

Play a central role in driving toward achieving theLong-Term Management Objectives target of ¥300
billion in net sales in the IT solutions business by 2025

“Co-creator” that paves the way
toward tomorrow with advanced
ICT and enthusiastic employees

Business Strategies
Based on our approach of exploring corporate issues andsocial problems with customers, we will interact more closelywith our customers and transform ourselves into a cocreating company through three business models, theservice-based business model, the systems integration
model, and the business co-creation model.
In this way, we will accelerate the upskilling of not only our
existing IT personnel, but also personnel capable of carryingout qualitative transitions in system integration, personnel
capable of creating services that meet our customers’ needs,
and personnel capable of co-creating business with ourcustomers. We will also implement initiatives to enhance
engagement with employees. Furthermore, through thesolutions that we provide, we strive to ensure that ourcustomers can enjoy value at a high level of quality.
While we view the IT market, which is steadily growing throughDX investments, as an opportunity, there is a risk that we will
not be able to respond to rapid advances in technology, develop
our personnel, or strengthen relationships with partnercompanies according to plan. While confirming progress, wewill take appropriate measures to mitigate this risk.
Through these initiatives, our goals for 2025 are to expand net
sales for the Company as a whole by 1.5x, to increase servicebased business model net sales by 2.0x, and to increase thenumber of personnel involved in business co-creation by 5.0x
(all compared to 2021 figures).

2021 Performance Topics
Sales ⬆

Increase due to solid performance for SI projects for the financial sector and projects tomeet the digitalization needs of the educational industry, and due to the recovery trend for
SI projects and embedded system development projects for the manufacturing sector

Operatingincome ⬆

Increase due mainly to a rise in gross margin from higher sales

Canon Marketing Japan Inc. I Integrated Report 2021

38

AREA

Canon MJ Group Management Strategy

Segment Strategies

Area Segment

Overview of the year ended December 31, 2021
Segment sales and operating income (Billions of yen)

We will maximize our use of the various channels, including business
partners, system partners and direct sales, to provide Canon products andIT solutions to small and medium-sized enterprises throughout Japan.

■■ Net sales

Yasuyuki Uotani
Vice President
Director of Area Segment

Operating income

245.0
Sales ratio bysegment

39%

232.5

Number of HOME (IT support service for small andmedium-sized offices) and IT maintenance andoperations contracts
Approx.

17.5

220.8

Approx.

Approx.

110,000

220,000

135,000

13.5
12.0
2021
(Results)

2022(Forecast)

2025(Plan)

2020(Results)

2021(Results)

2025(Target)* Reflects the figures announced on April 25, 2022.

MissionAim to design work practices for customers, and contribute to
local communities together with various partners and customers

Business Strategies
We aim to contribute to local communities utilizing our strengths ofdiverse sales channels that cover the entire country and our ability toformulate comprehensive proposals using Canon products and IT
solutions.
Against the current backdrop of accelerating digitalization, rising
threats for information security such as targeted attacks andphishing, an expansion in various support measures from thegovernment and revisions to laws, etc., the appetite for IT investment
among small and medium-sized enterprises is high. On the other
hand, however, many customers are facing the problem of not having
staff in charge of IT within the company, resulting in them not being

able to implement the initiatives they have planned. We will always
interact closely with our customers as partners to help find solutions
to their problems. In addition, we combine our strengths related tothe high quality products we handle and the high value-added support
we offer, with our strengths we possess in diverse supply chain
channels to provide total support for our customers’ work practicereforms and DX initiatives. To provide such a service, we are swiftly
working on improving our frameworks to enable us to better findsolutions to such issues through IT and training the personnel tosupport such initiatives.

2021 Performance Topics
Segment
overall

Sales ⬇

Decrease due to a decrease in sales of mainstay business equipment resulting fromthe impact of supply shortage

Operatingincome ⬆

Increase due to a rise in gross margin from higher sales of high-value-added products
and services, and due to efforts made to cut SG&A expenses

Sales ⬇ Office MFPs and laser printers

Sales ⬆ Maintenance services and ink cartridges for laser printers

Decrease due to the impact of product supply
shortages

Increase in comparison with the significant decrease of the previous year,
despite growth in telework, particularly in major cities

Sales ➡ IT solutions for small and medium-sized enterprises
Level with previous year due to the impact from the supply shortage for IT products such as business PCs, etc. despite increases insales of cloud services, security products and IT maintenance and operation services

39

Canon Marketing Japan Inc. I Integrated Report 2021

Takeshi Hiraga

Canon System & Support Inc.

President
Canon System & Support Inc.

Position within the Canon MJ Group

Mission

Perform direct sales of Canon products andIT solutions to small and medium-sizedenterprises nationwide and provide maintenanceand operating services for those products, etc.

Support evolution of the customer

Business Strategies
Amid the recent rapid reforms regarding working styles,
changes to the business environment, and so forth, it is
becoming increasingly important for our small and mediumsized enterprise customers to have in place an IT environment
designed to provide improved productivity and enhanced
efficiency of operations in order to ensure the continuation of
their business. However, there are some customers notproceeding with such initiatives, citing such reasons as “weare unclear on what we should introduce,” “we are worried
whether we will be able to utilize it if we do introduce it,” and“we don’t feel confident we can properly respond to system
troubles.” For these customers, we are selecting the optimum

products and solutions, and providing operating support andmaintenance after their introduction. Leveraging ournationwide network of business sites, which is a key strengthof ours, we are further accelerating the hiring and upskillingof personnel to provide the sales and technical support for ourcustomers’ growing IT needs. Our goal is to create anenvironment for our customers that allows them toconcentrate fully on their field of business. By helping ourcustomers to find solutions to their management challenges,
we will contribute to their corporate vitality and thereby
revitalize local regions and society.

2021 Performance Topics
Sales ⬇

Decrease due to a decrease in sales of mainstay business equipment resulting
from the impact of product supply shortage

Operatingincome ⬆

Increase due mainly to an increase in the weighting of high-value-added products
and services, particularly those of the IT solutions business, and efforts made to
cut SG&A expenses

Canon Marketing Japan Inc. I Integrated Report 2021

40

PROFE SSIONAL

Canon MJ Group Management Strategy

Segment Strategies

Professional Segment

Overview of the year ended December 31, 2021
Segment sales and operating income (Billions of yen)■■ Net sales

Production Printing

Industrial Equipment

Healthcare

Takashi Izaki

Yasuhisa Oba

Yoshinobu Kuroi

President
Canon Production
Printing Systems Inc.

Vice PresidentGroup Executive of
Industrial Equipment

President
Canon ITS Medical
Inc.

Sales ratio bysegment

5%

Operating income

39.8
31.5

46.0
5.0

3.4

2.5
2021
(Results)

2022(Forecast)

2025(Plan)* Reflects the figures announced on April 25, 2022.

Production Printing

Industrial Equipment

Healthcare

Business Strategies

Business Strategies

Business Strategies

By importing, selling, and supporting industrial equipment from abroad that meets
customer needs and addresses their issues, we are contributing to helping improve
Japan’s manufacturing productivity.

As a cadre of professionals who are well versed in medical IT, we will help resolve thesocial issues of the medical industry, which include shortages of medical personnel,
disparities among regions, and delays in digitalization, by deploying ICT in theworkplace, and supporting DX.

We aim to bring about production innovations for our customers by proposing
solutions for production printing equipment and workflow systems.
The shift to color inkjets in the data printing services market, and the move from
offset printing equipment to digital inkjet printers in Japan’s commercial andindustrial printing market, which has fallen behind trends in the global market, arebusiness opportunities. By leveraging our software development capabilities, one of
our key strengths, we are able to propose printing systems for the form printing
industry, point-of-purchase systems for the retail industry, and drawing management
systems for the manufacturing industry. Fulfilling the role of a true partner that ourcustomers can trust in, we work to construct win-win relationships in meeting thebroad spectrum of professional needs of our customers through proposing ouroriginal solutions together with hardware sales.
We will pursue further growth by seeking to convert the portfolio from hardwarefocused businesses to businesses originating in solutions by rebuilding the data
printing services business and opening up the commercial and industrial printing
market.

We research and identify excellent products from overseas and import a wide varietyof original products, and we sell, install and provide maintenance support for those
products. Having the personnel with the advanced technical skills required for this is
one of our key strengths.
By further improving our original products and services informed by an in-depth
understanding of the work sites of Japan’s manufacturers, we are working toenhance sales and maintenance support of not only semi-conductor related
equipment and testing and measuring equipment for semiconductor manufacturers
but also components and optical measuring equipment for the automotive,
semiconductor and liquid-crystal display industries.
We will concentrate even more on starting up new businesses while implementing
initiatives to strengthen relationships with business partners and train our
professional personnel to conduct business based upon sales rights and productpower that we possess, seizing business opportunities arising from the advancementof 5G, AI, and other technologies and the deterioration of social infrastructure.

Our strengths are our many points of contact with medical institutions and our large
numbers of highly specialized staff who can provide a one-stop shop for everythingfrom system proposals to introduction, operation and maintenance. In addition, ourother strengths provided as the Canon MJ Group are that we operate support centersin two locations as a precaution against natural disasters, and we develop and offer
cloud-based services in compliance with medical guidelines. In order to accurately
capture medical IT demand, which is expected to increase in the future, it is essential
to establish systems including an emphasis on training and securing personnel.
Furthermore, by further developing our customer base while expanding ourrecurring-revenue business, we aim to achieve further growth.

2021 Performance Topics
Segment overall

41

Sales ⬆

Overall increase due to increased sales of industrial equipment, despite decreases in
production printing and the healthcare business

Operatingincome ⬆

Increase due mainly to an increase in gross profit achieved from increased maintenanceservice sales for industrial equipment, and lower SG&A expense

Sales ⬇ Production printing

Sales ⬆ Industrial equipment

Sales ⬇ Healthcare

Decrease due mainly to lower sales of consumables accompanying fall in print
volume, etc., despite an increase in sales of continuous-feed printers

Increase due mainly to increased sales of maintenance services for inspection
and measurement equipment and semiconductor production-related equipment

Decrease due mainly to the absence of many of the previous year’s large projects
for hospitals to construct electronic medical record systems and medical IT
platforms, and a decline in projects for pharmacies, despite an increase inprojects for clinics

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

42

Canon MJ Group Management Strategy
Featured Topic

Implementation of 2025 Vision “Professional Corporate Group That Solves Social and Customer Issues Using ICT and the Power of Humans”

Using digital technology to enhance existing businesses

Increasing contact points with customers through the use of DX

Why promotethis?

• By employing online internet technology, we will enhance internal job
satisfaction and contribute to achieving the work style reforms.
 y utilizing the CANON INNOVATION LAB “WITH” to enable a variety of•B
initiatives to be experienced, we support job satisfaction at customers and insociety as a whole.

Business Scene Use Cases
In a zone that envisages a typical office, we enable customers toexperience Canon document solutions for themselves, online, every
day of the week. Rather than a showroom that assumes the customer
will visit in person, we have made this a space that customers from allover the country can view spontaneously, which has opened the way tochanges in our sales approach.
In other zones, instead of showing only
our own solutions we reproduce
scenarios in which we provide value tothe customer through cooperation
with other companies, offering anenvironment in which they canexperience real improvements inoperations for themselves.

CANON INNOVATION LAB “WITH”
We have opened the CANON INNOVATION LAB “WITH” as a space to work on creating new value by blending real andonline elements, and in which to promote co-creation activities. What we have poured into WITH is the Group’s desire
to walk side-by-side with society and our customers, and resolve their issues through the use of ICT and the power ofhumans. By providing high value-added solutions that utilize the strengths we have developed, we will provide
powerful support for DX to our customers.

Introducing solutions to
support DX that are tailored toour customers’ industry andoperations, and solutions thatutilize the latest technology.

Business
Solutions

Connect
StudioA studio for empoweringvisual performances that only
Canon could have created.
Capable of distributing online
seminars to up to 1,000
participants.

Event Use Cases
In the Connect Studio we distribute online seminars in a variety of genres.
At the “CP+2022 Online,” a world premiere show for cameras andphotographic images, Canon distributed a lot of content based on theconcept of “Imaging Avenue - Traveling with you to the next pictorial
expression.” This was provided not only for professionals andprosumers but also for the enjoyment of those who might come into
contact with cameras and photos in the future. In addition to theConnect Studio, we also livestreamed
and recorded content using the 3F Hall
S at the Shinagawa Canon S Tower.
It is also in frequent use for otherevents, such as online company
briefings, new product briefings forthe press, and for distributing all typesof online seminars.

New Business-Related Example

Simplified video creation
studio fitted out withequipment for shooting andediting footage.

43

Creative
StudioCanon Marketing Japan Inc. I Integrated Report 2021

Co-creation
Space

Used as a space for practicing
innovative activities that leadto the creation of new value,such as joint projects withexternal companies for thelaunch of new businesses,
and the in-house startup
program across the Group.

The lab is used as a base to distribute
various seminars for enhancing theinnovative capabilities of Group
employees, conduct workshops, and tooperate the Canon i Program for inhouse startups across the Group. In
addition, we are also investigating awide range of uses as a service forcustomers, such as employing it forpilot testing of a distribution service thatutilizes studio functions.
Canon Marketing Japan Inc. I Integrated Report 2021

44

Canon MJ Group’s Sustainability

Sustainability Management
Sustainability Promotion Structure

We will promote sustainability
management initiatives throughout
the Canon MJ Group.
Reviewing Fiscal 2021

Hatsumi Hirukawa
Director, Vice President
In charge of Group Corporate
Planning, Group Communication andGroup Service & Support
Director of Marketing Headquarters
Vice-Chair of Sustainability
Promotion Committee

To date, the Canon MJ Group has been promoting CSR
activities based on the Canon Group’s Kyosei corporate
philosophy. However, as a result of having evaluated those
activities in light of the changes to the external
environment, we reached the conclusion that it wasnecessary to rethink the Canon MJ Group’s activities.
Therefore, the Sustainability Promotion Committee wasestablished in February 2021 to examine sustainablegrowth for society and for Canon MJ. The Committee met
a total of four times* last fiscal year, and held active
discussions on putting into practice sustainability
management, focused mainly on reexamining the Group’s
reason for existence. The Committee discussed various
social issues surrounding society and the Company,
announced the materiality disclosed in this year’s
Integrated Report. As part of this, the Committee

Structure Chart

2021 Main Topics for Discussion

Board of Directors

February

Management
Committee

President

Sustainability
Promotion
Committee

Canon Marketing Japan Inc. I Integrated Report 2021

• Kick-off• SDGs Study Group• Discussion on the ideal form of the Group• Discussion on the Group’s focus areas

AugustCommittee members: Directors, Directors of Business Segment,
presidents of major Group companies,
heads of related divisions•D etermination of the Canon MJ Group
Environmental Vision 2050 and 2030 MediumTerm Environmental Targets• Announcement of endorsement of TCFD

December• Discussion on materiality

Materiality
prioritized efforts to address environmental problems
which are globally pressing issues.

and “biodiversity conservation.”
Against this backdrop, the Sustainability Promotion
Committee has held a series of discussions on theenvironment and formulated the Canon MJ Group
Environmental Vision 2050 and the 2030 Medium-Term
Environmental Targets, which are the interim targets of thevision. In addition, in order to enhance the effectiveness ofthe vision and interim targets, we endorsed therecommendations of the Task Force on Climate-related
Financial Disclosure (TCFD) in October 2021.

Based on the Canon Group’ corporate philosophy of Kyosei, we have positioned the realization of a society in which all people can live
together and work together in happiness, as a response to the expectations and demands of our stakeholders, and have identified
materiality of the Canon MJ Group through discussions on these matters held by the Sustainability Promotion Committee. In identifying
materiality, through dialogue with various stakeholders, we held discussions from the perspectives of demands placed on, and growthstrategies for the Canon MJ Group. We will continue to set KPI and action plans for materiality, which lead to steady action.
By continuing to refine our unique capabilities in our business, and broaden the areas of social issues in which we can apply suchstrengths, we will steadily deepen our contributions to the various issues.

Harmonious coexistencewith the global
environment

Expectations

Provide solutions that
advance people’s daily
lives, work, and society

Improve organizational
capabilities to enable
diverse humanresources to thrive

Canon MJ Group’s

Future Initiatives

45

Secretariat: Sustainability
Promotion Division

Committee Vice-Chair: Executive officer in charge of planning

Environmental Initiatives

Based on the materiality, which we have announced inthis report, we would also like to deepen our discussionof specific KPI. With regard to the environment, inparticular, we have concentrated on providing concrete
examples, indicators and targets regarding the risks andopportunities concerning effects of the Canon MJ Group'sbusinesses in this Integrated Report. From 2022 onward,
we will concentrate on conducting analysis that will
identify the risks and opportunities concerning effects on

May

Committee Chair: President* Major themes for consideration by the Sustainability Promotion Committee are listed on page 46.

In recent years, the global movement toward
decarbonization has accelerated with regard to measures
to address climate change. In Japan also, efforts toward
carbon neutrality are underway, including the government’s
Declaration on Carbon Neutrality for 2050 and the revised
CO2 emission reduction targets. In the area of resource
recycling, the issue of plastics has become a global
environmental issue, and with growing interest in
biodiversity, companies are required to manage theirbusinesses in consideration of the global environment,
including “tackling climate change,” “resource recycling,”

The Sustainability Promotion Committee is linked to each of the committees under the Management Committee, and takes up
important themes for promoting sustainability management as appropriate and discusses them within the Committee.

Materiality

business, and report our outcomes.
While proceeding with our initiatives to respond to thedemands from society, we will deepen cooperation withinternal and external stakeholders to address the
expectations from society and develop frameworks
through which we can provide solutions that advancepeople’s daily lives, work, and society.

Promote responsible
supply chains

Demands

Promote risk and crisis
management

Implement soundgovernanceCanon Marketing Japan Inc. I Integrated Report 2021

46

Canon MJ Group’s Sustainability

Environment (Natural Capital)
Harmonious Coexistence with the Global Environment

1▪ Reduction of In-house CO2 Emissions

Formulation of the Canon MJ Group Environmental Vision 2050

We upgrade multifunction printers (MFPs) and lighting equipment used in offices to energy-efficient models and implement
initiatives for office equipment to reduce lighting and air conditioning power consumption, etc. We also shrink our environmental
footprint by improving work processes and work practices. Examples include car-sharing sales and service vehicles and noovertime work days. We effectively slashed to zero our CO2 emissions from electricity consumption in the showroom andcustomer service areas of Canon S Tower and branches. This achievement was made possible through purchases under the
J-Credit Scheme*4, under which credits for power derived from renewable energy sources offsets electricity consumed fromother sources.

The Canon MJ Group is promoting sustainability management based on the Canon Group’s corporate philosophy of Kyosei, and has
formulated the Canon MJ Group Environmental Vision 2050 and the Canon MJ Group 2030 Medium-Term Environmental Targets,
which are interim targets, toward the realization of a sustainable society. The Canon MJ Group Environmental Policy was also revised
accordingly.

Scenario Analysis

2030
Medium-Term
Environmental
Targets

Canon MJ Group1

Realization of carbon neutrality

Environmental
Vision2050

2

Contribution to the realizationof a resource-recycling society

3

Contribution to biodiversity
conservation and pollution
prevention*4 The Japanese government certifies J-Credits under the J-Credit Scheme of the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and theMinistry of Agriculture, Forestry and Fisheries. The scheme encourages entities to adopt and expand the use of renewable energy by converting intangible CO2
emissions reductions and absorptions into credits that they can trade in markets.

▪ Contributing to Customers’ CO2 Reduction through Our Business
Through providing environmentally friendly products, such as energy-saving products, to customers, the Canon MJ Group iscontributing to customer’s efforts to reduce their power consumption.
In addition, through the provision of various IT solutions, such as the consolidation of IT infrastructure through the use of data
centers and the streamlining of document storage and retrieval through document solutions, we aim to contribute to the
reduction of energy consumption by improving customers’ operational efficiency, reducing space, and conserving resources, andthereby contributing to the reduction of CO2 emissions in society as a whole.

Present
2022

2030

2050
2

Canon MJ Group 2030 Medium-Term Environmental Targets
1

Realization of Carbon Neutrality• Reduce in-house CO2 emissions by 38% (compared to 2021)*1, *2• Contribute to customers’ CO2 reduction through our business• Zero emissions of product waste (recycling rate of 99.9% or more)*3

2

Contribution to the Realization of
a Resource-Recycling Society

Realization of Carbon Neutrality• Reduce waste by ascertaining the amount of waste in the Group and promoting
plastic reduction activities•R educe water consumption by ascertaining the Group’s water consumption volume
and strengthening the efficient use of water

Contribution to the Realization of a Resource-Recycling Society▪ Collecting Used Products and Recycling Activities
The Canon MJ Group collects used Canon products from offices and other locations at nine collection centers nationwide andrecycles them within the Group in cooperation with Canon Eco Technology Park*5 and Top Business Machines Co., Ltd., which
are Canon Group recycling sites.
Canon MJ also provides the “Canon Green Recycling Service” based on the Ministry of the Environment’s wide-area certification
system to promote collection and recycling activities of used products. This service eliminates the need for customers to issue,
manage, and report manifest slips when discharging used Canon products*6 as industrial waste in offices and other locations,
thereby improving customer convenience and contributing to the promotion of recycling.

• Conduct Group water risk analysis and information disclosure

3

Contribution to Biodiversity
Conservation and Pollution Prevention• Renewal of social contribution activities toward biodiversity conservation• Elimination of hazardous materials in the supply chain through green procurement*1 Calculated using the “SBT Reduction Target Calculation Tool” provided by the “Green Value Chain Platform” of the Ministry of the Environment.
*2 In-house CO2 refers to the total GHG emissions of Scope 1 and Scope 2*3 R
 ecycling rate = Amounts recycled (total weight after excluding simple incineration and landfill disposal from total volume of products recovered and processed frommarketplace) / total volume of products recovered and processed from marketplace

Please refer to the website for details.
▪Environmental Vision 2050 and 2030 Medium-Term Environmental Targets

https://canon.jp/corporate/csr/environment/vision▪Environmental Policy https://canon.jp/corporate/csr/environment/policy

47

Canon Marketing Japan Inc. I Integrated Report 2021

▪ Water Risk Initiatives
As part of our water risk initiatives, we conducted a water risk assessment of the Canon MJ Group’s business locations in Japan
using Aqueduct*7 of the World Resources Institute (WRI), and confirmed that the overall water risk level falls into the “low” or“low-medium” risk level. Monthly water consumption is ascertained and third-party verification is obtained for the Canon Group.
In addition, due to the increased risk of flooding from torrential rains and other factors caused by the recent increase in extreme
weather events, we have examined tsunami submersion hazard maps and relocated our domestic business locations at highrisk of flooding.
*5 Operated by Canon Ecology Industry Inc.
*6 Used Canon products at home are considered general waste and should be disposed of in accordance with the rules of your local government.
*7 Global tool for water risk assessment developed by the World Resources Institute (WRI)

Canon Marketing Japan Inc. I Integrated Report 2021

48

Canon MJ Group’s Sustainability

Environment (Natural Capital)
3

Contribution to Biodiversity Conservation and Pollution Prevention

Initiatives for TCFD Recommendations

Under the Canon Group’s common Biodiversity Policy, the Canon MJ Group is working on the Furusato (hometown) Project with theaim of passing on a beautiful and verdant hometown for future generations. We endeavor through the project to encourage
participation in the activities of groups with which we are collaborating and to raise awareness of biodiversity and its conservation
based on My Action Declaration*8, a set of five actions to protect biodiversity.
As our initiatives to prevent pollution, we areworking to eliminate hazardous chemical
substances by complying with the Global
Canon Green Procurement Standards*9, andto properly manage chemical substancesused in our business activities.
*8 To preserve biodiversity, we conduct initiatives that allow
us as individuals to take action from something familiarin our daily lives in order to feel more connected tobiodiversity.
*9 Please refer to Engaging in Green Procurement on page 53.

▪ Governance
Policies related to climate change are discussed at the Sustainability Promotion Committee*10, which is chaired by the President,
and determined at the Management Committee, and those policies are reflected in business strategies. The 2030 Medium-Term
Environmental Targets, including climate change response, are managed by the Sustainability Promotion Committee and at its
meetings held four times annually, the committee monitors the status of progress of the initiatives and provides directions.
*10 Please refer to Sustainability Promotion Structure on page 46.

▪ Strategy
The specific risks and opportunities regarding the impact of climate change on the Canon MJ Group’s business for the 1.5°C
scenario and the 4°C scenario based on information provided by IPCC and IEA, etc.
Classifications

Scenario*11

Impact on businessSpecific examples

Activities in Shizuoka Prefecture

Activities in Nara Prefecture

Environmental Management

Transition
risks▪ Environmental Management System
The Canon MJ Group is constructing an environmental management system that is common to the Canon Group based on
ISO14001 as scheme to realize continual improvement of environmental protection activities.
Under the environmental management system, the Canon MJ Group determines environmental targets each year andformulates an action plan to realize those targets as part of business activities. Moreover, in order to ascertain the status ofsuch activities and the issues that are faced, we implement environmental internal audits and are working to continuously
improve and strengthen environmental protection activities.

▪ Awareness Raising Activities Inside the Canon MJ GroupAs part of initiatives aimed at providing solutions toenvironmental issues in the Canon MJ Group, we arepromoting greater awareness by creating environmental
slogans, publishing information on the intranet, and publishinginternal bulletins that are sent to all employees of the Group.

Government
policies / legal
frameworks
Market• Impact on trading by not meeting business partner demands for climate change response•L owering of reputation from holding back on climate change response

Chronic state• Increase in air conditioning maintenance and cooling costs due to frequent abnormally
hot temperatures

Physical risks

4°C
Acute state• Increased demand for solutions to improve efficiency of distribution and transportation
1.5°C

Products andservices• Increased demand for energy-saving solutions (technological upgrades, optimization,
surveillance, management)• Increased demand for carbon neutral data centers, plastics and water
4°C
Resilience• Inability to continue business activities due to large typhoons and isolated heavy rain
• Inability to provide products and services due to supply chain disruptions

Resource efficiency

Opportunities

CO2

1.5°C

Reputation

Environmental slogans

Let’s reduce• Increased costs due to obligations regarding carbon tax and emissions trading• Increased demand for network cameras, sensors, etc. as part of measures against
large-scale disasters• Increased demand for highly disaster resilient data centers*11 IPCC SSP1-1.9 (RCP1.9) and IEA SDS is used for the 1.5°C scenario, and IPCC SSP5-8.5 (RCP8.5) is used for the 4°C scenario.

T O P I C

▪ Risk Management

Nishi-Tokyo Data Center No. 1 Certified as an Outstanding Specified Anti-Global Warming Facility～Contributing to the Realization of a Sustainable Society as a Business Site with Particular Excellence in Global Warming Countermeasures～
The Nishi-Tokyo Data Center No. 1, owned and operated by Canon IT Solutions Inc., wasrecognized by the Tokyo Metropolitan Government’s Bureau of Environment as an
Outstanding Specified Anti-Global Warming Facility (near-top-level business facility) for
its efforts to reduce CO2 emissions and environmental impact by “optimizing the operating
frequency of air conditioners” and introducing “free cooling” heat source facilities that
efficiently exchange heat while utilizing outside air during winter.
Outstanding Specified Anti-Global Warming Facilities are locations certified by the Tokyo
Metropolitan Government as having met the “criteria specified by the Governor” for“business sites with a particularly outstanding level of promotion of global warming
countermeasures.”49

Canon Marketing Japan Inc. I Integrated Report 2021

With regard to the physical risks such as large-scale wind and water damage, flood damage, etc. brought about by climatechange, the Risk and Crisis Management Committee*12 performs crisis management activities such as examining andconstructing crisis management systems.
*12 Please refer to Promoting Risk and Crisis Management on page 54.

▪ Metrics and Targets
Canon MJ Group has formulated the “Canon MJ Group Environmental Vision 2050*13” and the “2030 Medium-Term Environmental
Targets*14.” Under these, we have formulated the target of 38% reduction in in-house CO2 emissions (compared to 2021) toward “1.
Realization of Carbon Neutrality” as a climate change target. In addition, the Canon MJ Group is aggregating and disclosing its
GHG emissions*15.
Nishi-Tokyo Data Center No. 1*13 Please refer to Formulation of the Canon MJ Group Environmental Vision 2050 on page 47.
*14 Please refer to Canon MJ Group 2030 Medium-Term Environmental Targets on page 47*15 Please refer to ESG Data on page 103.

Canon Marketing Japan Inc. I Integrated Report 2021

50

Canon MJ Group’s Sustainability

Society
Improving Organizational Capabilities to Enable Diverse Human Resources to Thrive
Diversity
The Canon MJ Group aims to be a corporation in which diverse people with different personalities and values can play an active roleand grow with one another.

▪ Supporting Women’s Advancement
In support of the Women’s Action Plan of Keidanren (Japan
Business Federation), Canon MJ and Canon IT Solutions Inc.
submitted voluntary plans to appoint female officers and managers.
Also, Canon System & Support Inc., Canon Production Printing
Systems Inc., Canon BizAttenda Inc., and Canon Customer Support
Inc. formulated action plans based on their specific challenges tofoster the participation of women in workplaces and appoint andrecruit female managers. By 2025, Canon MJ looks to have womenaccounting for 6.0% of managerial positions and 20.0% of deputy
manager roles.
Moreover, both Canon MJ and Canon IT
Solutions have acquired “Eruboshi (twostars)” certification from the Minister of
Health, Labour and Welfare as companies
with excellent promotion of active roles for
women.

We staggered work hours and broadened the scope ofteleworking to help safeguard employees from COVID-19.

Canon MJ and Canon IT Solutions have acquired Platinum Kurumin Certification for excellence in offering childcare support.

The Group will continue pushing ahead with new graduate andmidcareer hiring of individuals with disabilities.

(Number of people)
200
150

150.0

■ Number of employees
Percentage of employees with disabilities

150.0

149.5

142.0

147.5
2.32

100
50
0

(%)
2.4

2.2

2.10
2017

2.15
2018

2.19
2019

2.15
2020

2021

2.0
(FY)

Career Development Support
The Canon MJ Group has defined its “ideal human resources” for realizing the development of skilled human resources provided in
its Long-Term Management Objectives (2021-2025), and is working proactively on human resource development. (Please see page 31
for details.)
We empower all employees to learn and grow by providing the support they need while encouraging voluntary learning. Our Human
Resources Department oversees overall training. It joins hands with departments handling specialist training and workplacesupervisors overseeing day-to-day operations to design ideal experiences for each employee and foster their growth.

▪ Asia Trainee System
The Canon Group maintains the Asia Trainee System, through which it sends young employees to undertake language and practical training
at overseas subsidiaries in Asia. The goal is to foster professionals who are familiar with local languages, cultures, and business practices.
This is one of the training programs of Canon Inc. We want those participating in the program to become strong candidates for future
overseas assignments.

▪ In-house Recruiting Program
We support career development through the Job Opening Bulletin System. This program encourages employees to take on new positions
and more fully tap our human resources.

Canon Marketing Japan Inc. I Integrated Report 2021

mental health that the Group has been working on thus far. In
addition, Canon MJ has appointed a director in charge, works tostandardize the health support policies throughout the entire
Group and supports the health of employees.
As a result of these efforts, 11 Canon MJ Group companies,
including Canon MJ, were recognizedunder the 2022 Certified Health &Productivity Management
Outstanding Organizations
Recognition Program for corporations
that excel particularly in health andproductivity management.

Overall image of work practice reforms
Transform the awareness, knowledge andactions of each and every person

Work place• Link new work practices and business site strategies•C reate a mechanism for bringing about atransformation in the internal culture• Build a diverse workplace

Employees with Disabilities* Calculated according to prescribed working hours, disability degrees, and otherfactors in keeping with the Ministry of Health, Labour and Welfare standards.

51

We formulated the Health Management Three-Year Plan, andunder the Canon MJ Group Safety and Health Activity Policy
formulated each year, we are engaged in health and productivity
management with an additional focus on infectious diseases aswell as the three challenges of cancer, lifestyle disease andWe launched the Work Practice Reform Promotion Project toenhance productivity Groupwide so employees can complete
their tasks during regular working hours.

Canon MJ has rolled out a range of programs to foster career plans and create more attractive employment
environments by empowering its people to balance work with childcare and nursing care commitments.

The Canon MJ Group is committed to employing people withdisabilities, and accordingly endeavors to create a barrier-freework environment. As of June 2021, 2.32% of Canon MJ’s
employees were people with disabilities.

Based on a “Health First” principle set forth in the Canon Codeof Conduct, the Canon MJ Group promotes initiatives to support
the health of employees and realize health and productivity
management. The health of each and every employee is linked
to increasing performance and engagement and contributes tosustainable improvements in our corporate value by
maximizing the value of human capital.

Work Practice Reforms (Workplace, Work Process and Workstyle Reforms)▪ Balancing Professional and Private Commitments▪ Employing People with Disabilities

Health and Productivity Management

Work
process• Raise awareness by implementing no-overtime work days andsharing results on our information site

Realize new work practices that generate
added value• Visualize productivity and implement measures• Transform shared services• Reassess work processes•D iversify work practices by using satellite offices and telework andstaggering work hours•E nhance work efficiency by encouraging the use of IT tools androbotic process automation (RPA)*

Shift to flexible work practices that are notlimited by time or location

Work style• Pursue the organizational community that we wish
to build• Shift to highproductivity
work practices
 evelop•Dbusinesssolutionsbased onCanon MJ
Group’s own
work-styleadvances
KPI: 50% orlower rate of
employees in
the office• Make communication more active in all directions* RPA is an abbreviation of Robotic Process Automation, which is a process in whichsoftware robots complete tasks using applications on PCs• Build systems for supporting telework

T O P I CWork Practice Reforms (Workplace Reforms)
The Work Place Task Force within the Work Practice Reform Promotion Project is working on “Create a mechanism for bringing about ashift in the internal culture” and “Build a diverse workplace” aimed at creating highly productive offices adapted to the new normal era.
As part of transforming the internal culture, the Task Force is renovating the offices in Canon MJ’s headquarters building to create new
layouts that match the work situations and job characteristics. These new layouts are arranged to provide solo work seating optimized
for work that requires concentration and co-creation seating that allows creative concepts to be born and stimulates communication.
Moreover, as part of building a diverse workplace, we
provide places conducive to ideal work scenes throughestablishing our own satellite offices and are taking
measures to achieve improved productivity by allowing
our employees to choose their place of work.
We are encouraging each employee to individually
revolutionize their consciousness through thecatchphrase “challenge orthodoxy” to improve
productivity.

A refurbished officeSatellite office seating

Canon Marketing Japan Inc. I Integrated Report 2021

52

Canon MJ Group’s Sustainability

Society

Corporate Governance

Promoting Responsible Supply Chains

Promoting Risk and Crisis Management

Human Rights Initiatives

Risk and Crisis Management

The Canon MJ Group has clearly stated in the Canon Group
Code of Conduct that individual officers and employees are torespect each other’s character and individuality, and ensurethat they do not discriminate unjustly for reasons of race,
religion, nationality, gender, or age, and so forth. This code has
been made known throughout the Group.
Furthermore, in 2021 we formulated the Canon Group Human
Rights Policy, which clearly sets out our position on humanrights under the corporate philosophy of Kyosei, including

respect for international norms such as the UN Guiding
Principles on Business and Human Rights and the International
Labor Organization (ILO) Declaration on Fundamental
Principles and Rights at Work, and on carrying out humanrights due diligence.
Looking ahead, the Canon MJ Group will identify business risks
related to human rights, labor standards, and safety andhealth, and take measures to address these risks in accordancewith their importance.

Procurement Activities
The Canon MJ Group, while complying with laws andregulations regarding procurement and giving consideration toprotecting the environment, strives to build amicable trading
relationships and ensure that our basic stance on our
procurement activities is understood by our suppliers by
disclosing on our website the “Procurement Basic Policy” forstable purchasing at reasonable prices.
As part of our measures to ensure rigorous procurement

compliance, we conduct training regarding our code of conduct
and procurement laws and regulations for employees assigned
to the Procurement Department. When conducting trade with a
new supplier, we evaluate the risks beforehand and at the timeof commencing trade, we conclude master agreements,
committing to complying strictly with laws and ordinances andto engaging in fair and honest transactions that do not violate
corporate ethics or erode social trust.

▪ Engaging in Green Procurement
We endeavor to eliminate hazardous chemical substances by complying with the Global Canon Green Procurement Standards. We makesure that the product chemical management systems established for the supplier are continually being implemented and that the supplieris complying with the Global Canon Green Procurement Standards.

▪ Measures to Ensure Responsible Minerals Procurement
The Canon MJ Group tackles the challenge of sourcing minerals responsibly in conflict-affected areas in accordance with the Canon Group
Basic Policy on Responsible Minerals Sourcing. We ensure peace of mind for Canon product customers by requesting suppliers to confirm
the provenances of minerals in their products and help us eliminate the use of conflict minerals.

Quality Management
For the value (products, services and support) that the Canon
MJ Group provides to customers, we have established our own
unique quality management system that augments therequirements of ISO9001, the international quality control
standards, and are working to improve customer satisfaction.
For the quality management system, we are working to
optimize the processes from the commercialization concept tothe end of after-sales service and improve the results achievedin each process in compliance with the Company regulations

and detailed rules regarding quality assurance and with eachquality management guideline according to the characteristics
of each product, service and support.
Furthermore, we manage quality of products and other items inthe marketplace by cooperating through IT systems with Canon
Inc., which oversees manufacturing, and with othermanufacturers, and strive to respond swiftly to customer
issues.

We have established a Risk and Crisis Management Committee for the purpose of building and implementing risk management systems
and crisis management systems in order to improve corporate value of the Canon MJ Group and minimize loss for our stakeholders.

Areas of activity of the Risk and Crisis
Management Committee(1) Preparation and set up of risk management systems(2) P reparation and set up of crisis management systems(including BCP)
(3) R aising and promoting awareness of corporate ethics
and compliance(4) Information security(5) Internal reporting response

President

Canon Marketing Japan Inc. I Integrated Report 2021

Management Committee

Chairperson: Director in charge of Group General
Administration & Human Resources
Committee Vice-Chair: Vice President in charge of Group IT
Members: Vice Presidents and above, Corporate Planning
Headquarters Group Executive, Brand Communication
Headquarters Group Executive, Legal and Intellectual
Property Headquarters Group Executive
Risk and Crisis Management Committee meetings held fourtimes a year

Risk and Crisis
Management Committee

Promoting Corporate Ethics and Compliance
For the Canon MJ Group, compliance is not simply a matter ofobeying laws and regulations. We also commit to complying
with laws and social rules, maintaining social justice, andcontinuing to meet the expectations of society. We engage incompliance from the perspectives of initiatives to raiseawareness, educating, and undertaking organizational activities
to ensure that all of our people act ethically and obey the law.
To all officers and employees of the Canon MJ Group, we
distribute copies of the Canon Group Code of Conduct, which
presents standards that they should uphold in performing theirduties, and Compliance Cards, to ensure employees are fully

aware of the “Three Selfs” spirit (covering self-motivation,
self-management and self-awareness), while providing themwith education and training to enhance awareness and instillknowledge. Moreover, we distribute compliance-related email
newsletters to help our people better understand and adhere tolaws and regulations, and rules relating to our business. In
addition, we normally convene the compliance meeting todiscuss and confirm compliance risks and countermeasures at
each work site, important matters related to compliance andother matters. We also maintain an ongoing internal reporting
system.

Promoting Information Security▪ Policy
The Canon MJ Group helps realize a secure society by working tostrengthen the foundations of information security as part of CSR.
The Group takes measures against cyberattacks and otherinformation security risks, and considers appropriate handling of
information assets used in business activities to be an importantmanagement priority. We strive for continuous improvement
through using third-party certification such as the “ISMS

conformity assessment scheme” and the “PrivacyMark System.”
While promoting information security management based on
information security governance according to management tier, we
conduct activities to raise awareness and training to build
knowledge for all employees.

▪ Cybersecurity Countermeasures
In light of the recent increases in diversity, sophistication, andcleverness of cyberattacks, the Canon MJ Group established theCanon Marketing Japan Group Computer Security Incident
Response Team (Canon MJ-CSIRT) in January 2016, and has beenpromoting activities with the aim of minimizing cybersecurity risks
and damage to the Group’s internal infrastructure and to products
and services supplied to customers.
Canon MJ-CSIRT is organized with members from three divisions
within Canon MJ: the IT division, the information security division,

53

As of April 1, 2022

Board of Directors

and the product and service quality division. Canon MJ-CSIRT
operates at the center of the Group, preventing and monitoring forcyberattacks, and mounting a response when attacks occur.
Moreover, since it is difficult for one company alone to gather
information and research the latest attack and defense methods
around cyberattacks, the team collaborates with the Canon
Group’s CSIRT and other external institutions and organizations,such as the Nippon CSIRT Association.

Canon Marketing Japan Inc. I Integrated Report 2021

54

Canon MJ Group’s Sustainability

Corporate Governance

9

11

7

8

5

3

6

1

10

2

12

4

Directors and Audit & Supervisory Board Members
Standing Audit & Supervisory Board Member

11 Nobutoshi Matsumoto[Outside]

As ofApr. 1985:	Entered Canon Inc.
Aug. 2013:	General Manager in charge of Finance Division of
Finance & Accounting Center of Finance & Accounting
Headquarters
Apr. 2014:	General Manager of Finance Division of Finance &Accounting Center of Finance & Accounting
Headquarters
Mar. 2020:	Standing Audit & Supervisory Board Member of theCompany (present)

9Standing Audit & Supervisory Board Member

Masatoshi Tanise

As ofApr. 1984:	Entered the Company
Jul. 2012:	Senior General Manager of Consumer Business
Promotion Group of Consumer Sales Business
Headquarters of Imaging System Company
Jan. 2020:	Principal Staff Manager of Consumer East Japan Sales
Group of Consumer Business Unit
Mar. 2020:	Standing Audit & Supervisory Board Member (present)

55

Canon Marketing Japan Inc. I Integrated Report 2021

7

Director

Toshiharu Hasebe[Outside][Independent]

As ofApr. 1979:	Entered Nippon Telegraph and Telephone Public
Corporation
Jun. 2009:	Member of the Board of NTT Communications
Corporation
Jun. 2012:	Executive Vice President
Jun. 2014:	President and Chief Executive Officer and Member of theBoard of NTT Advertising, Inc.
President and Chief Executive Officer and Member of theBoard of NTT Publishing Co., Ltd.
Jun. 2015:	President and Chief Executive Officer and Member of theBoard of Nippon Computer Arts, Inc.
Apr. 2020:	President and Chief Executive Officer and Member of theBoard of DX Catalyst Inc.
Mar. 2022:	Outside Director of the Company (present)

8Standing Audit & Supervisory Board Member

Shiro Hamada

As ofApr. 1984: Entered the Company
Apr. 2011:	Deputy Chief Executive of Administrative Headquarters ofCanon IT Solutions Inc.
Jul. 2013:	Group Executive of Finance & Accounting Headquartersof the Company
Mar. 2016:	Director
Mar. 2016:	Vice President
Jan. 2018:	Director in charge of Group Finance & Accounting andGroup Auditing
Mar. 2021:	Executive Vice President & Director of Canon System &Support Inc.
Apr. 2021:	Director in charge of Audit Office, Planning Headquarters
and Administrative Headquarters
Mar. 2022:	Standing Audit & Supervisory Board Member of theCompany (present)

5

Director

Akio Dobashi[Outside][Independent]

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 of Sojitz Holdings Corporation andSojitz Corporation
Representative Director, President & CEO of Sojitz
Corporation
Apr. 2007:	Representative Director and Chairman
Apr. 2012:	Director
Jun. 2012:	Special Advisor
Jun. 2014: Advisor
Jun. 2015:	Outside Director of OSJB Holdings Corporation
Mar. 2016: Outside Director of the Company (present)
Jun. 2017:	Outside Director of Maeda Corporation (present)

3

Director & Vice President

Hatsumi Hirukawa

As ofApr. 1987:	Entered the Company
Jan. 2015:	Senior General Manager of Area Business Promotion
Group of Area Sales Headquarters of Business Solution
Company
Jul. 2016:	Group Executive of Corporate Planning Headquarters
Apr. 2017:	Executive Officer
Apr. 2019:	Vice President (present)
Jan. 2020:	Director in charge of Group Planning and Group Service& Support (present) and Director of Service & Support
Headquarters
Mar. 2020:	Director (present)
Apr. 2020:	Director in charge of Group Communication (present)
Mar. 2021:	Director of Business Products Marketing Section ofMarketing Headquarters (present)
Jan. 2022:	Director of Marketing Headquarters (present)

6

Director

Yoshio Osawa[Outside][Independent]

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
Jun. 2008:	Representative Director and Managing Executive Officer
Apr. 2011:	Representative Director and Senior Managing Executive Officer
Apr. 2013:	Representative Director, Assistant to President and CEOof Sumitomo Corporation
Adviser of SCSK Corporation
Jun. 2013:	Representative Director, President & COO of SCSK Corporation
Apr. 2015:	Representative Director and President
Apr. 2016:	Chairman of the Board of the Directors
Apr. 2017:	Director
Mar. 2018:	Outside Director of the Company (present)
Jun. 2019:	Outside Director of Citizen Watch Co., Ltd. (present)

1

President & Representative Director

Masachika Adachi

As ofApr. 1982:	Entered the Company
Jul. 2009:	Group Executive of MA Sales Headquarters of Business
Solution Company
Mar. 2013:	Vice President
Mar. 2015:	Director
Mar. 2015:	Senior Vice President
Apr. 2015:	Company President of Business Solutions Company
Jan. 2018:	Director in charge of BPO Function Unit and Director ofEnterprise Business Unit
Mar. 2018:	Director in charge of Group ITS and IT Platform Function Unit
Mar. 2018:	Representative Director, President and Chief Executive
Officer of Canon IT Solutions Inc.
Apr. 2018: President
Apr. 2019: Senior Managing Vice President of the Company
Mar. 2021: President & Representative Director (present)
Executive President (present)

Standing Audit & Supervisory Board Member

10 Iwao Hashimoto[Outside][Independent]

As ofApr. 1984:	Entered The Yasuda Fire and Marine Insurance Co., Ltd.
Apr. 2010:	General Manager of Eastern Hokkaido Branch of Sompo
Japan Insurance Inc.
Jun. 2012:	General Manager of Osaka Corporate Sales Department
No. 2 and General Manager in charge of Sales Promotion
OfficeApr. 2014:	General Manager of Osaka Corporate Sales Department No. 1
Sep. 2014:	General Manager of Osaka Corporate Sales Department
No. 1 of Sompo Japan Nipponkoa Insurance Inc.
Apr. 2016:	Executive Officer and General Manager of Hokkaido
Headquarters
Apr. 2018:	Executive Officer and General Manager of Kanto
Headquarters
Apr. 2019:	Managing Executive Officer and General Manager ofKanto Headquarters
Mar. 2020:	Standing Audit & Supervisory Board Member of theCompany (present)

2

Director & Senior Vice President

Minoru Mizoguchi

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
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)
Mar. 2021:	Director (present)
Mar. 2022:	Senior Vice President (present) and Director in charge ofGroup Legal and Intellectual Property (present)

Audit & Supervisory Board Member

12 Shigeo Hasegawa[Outside][Independent]

As ofJul. 1980:	Registered as a Certified Public Accountant
Jan. 2006:	Head of Global Service Group of Tohmatsu & Co.
(presently Deloitte Touche Tohmatsu LLC)
Jun. 2010:	Leader of IFRS Center of Excellence of Deloitte Touche
Tohmatsu LLC
Apr. 2012:	Specially-appointed Professor of Chuo Graduate Schoolof Accounting of Professional Graduate School of Chuo
University
Mar. 2014:	Standing Audit & Supervisory Board Member of theCompany
Mar. 2018: Audit & Supervisory Board Member (present)

4

Director & Vice President

Tsuyoshi Osato

As ofApr. 1988:	Entered the Company
Apr. 2014:	Group Executive of Administrative Headquarters ofCanon IT Solutions Inc.
Mar. 2018:	Director & Vice President
Jul. 2018:	Group Executive of Procurement Headquarters of theCompany
Mar. 2021:	Vice President (present), Group Executive of Finance &Accounting Headquarters (present), and Director in
charge of Group Finance & Accounting and Group
Auditing (present)
Mar. 2022:	Director (present) and Director in charge of Group
Procurement (present)

Canon Marketing Japan Inc. I Integrated Report 2021

56

Canon MJ Group’s Sustainability

Corporate Governance
Basic Stance on Corporate GovernancePrincipal Meeting Bodies

Overview of Corporate GovernanceWe recognize that sustainable growth in corporate value requires ongoing
improvement in such areas as management transparency and themonitoring of progress toward management targets. This is reflected in
our wide-ranging initiatives to strengthen corporate governance.

Organizational Format

Company with Audit &Supervisory Board members

Use of Executive Officer System

Yes

Number of Executive Officers

26

We maintain a structure in which the representative director oversees Companywide business strategies andexecution, while supervision of business domains and headquarters functions is primarily through executive
directors, and add at least two independent outside directors to ensure sound management. In accordancewith laws and ordinances, the Board of Directors monitors important decisions and implementation.

Ratio of Outside
Directors

42%

Board of Directors
7 in total
Term of office: 1 year

Other decisions are handled by the representative director or under the representative director’s
direction and supervision through executive officers whom the Board of Directors appoints through its
resolutions to assume responsibility for making and implementing decisions for business domains andheadquarters functions.

16 times

Corporate Governance Organization (As of March 29, 2022)

As well as engaging in regular deliberations about results, executive appointments, and other matters, theBoard of Directors extensively discusses and decides about important matters relating to legal affairs andBoard regulations at gatherings that are normally held once monthly, or as needed, and at Management
Committee meetings attended by the directors of Canon MJ and the presidents of major subsidiaries.

held in fiscal 2021

General Meeting of Shareholders
Appointment / Dismissal

Appointment /Dismissal

Appointment / Dismissal
Monitoring

Board of Directors
7 Directors

Inquiry
ReportAudit & Supervisory Board

Cooperation

5 Audit & Supervisory
Board Members

Nomination andRemuneration Committee

Independent Auditor
Cooperation

Management Committee

Internal Auditors Office

Accounting Audit

Audit & Supervisory
Board
5 in total
Term of office: 4 years

60%

There are five Audit & Supervisory Board members, of whom three are outside auditors. Their duties
include attending Board of Directors’ meetings, communicating with directors and other parties, andperusing important documents in line with the auditing policies and work allocations that the Audit &Supervisory Board stipulates, and conducting rigorous audits by examining operations and property.

17 times

Deloitte Touche
Tohmatsu LLC

held in fiscal 2021

Cooperation

Ratio of Outside
Directors

Nomination andRemuneration
Committee
4 in total

Sustainability Promotion Committee
Disclosure Committee

The Audit & Supervisory Board functions independently of the Board of Directors, and comprises
individuals who are familiar with the Company’s business or corporate management and who haveaccounting or other expertise. At least one outside Audit & Supervisory Board member is an outside
person who fulfills the independence criteria of Standard that the Board of Directors separately
determines. The Audit & Supervisory Board cooperates with the independent auditor and the Internal
Auditors Office to assess performance and corporate assets and ensure sound management.

Ratio of Outside
Audit & Supervisory
Board Members

The Company maintains a voluntary four-person Nomination and Remuneration Committee comprising
the president, one director, and two independent outside directors. This Committee conducts
deliberations on the nomination of candidates for director and vice president, as well as considering theappropriateness of remuneration system for directors and executive officers who are vice presidents orabove, and reports to the Board of Directors.

50%

Internal Audit

Internal Controls Evaluation Committee▪H olding of an Executive Officer Meeting attended by all directors, Audit & Supervisory Board members, and executive officers
AdviceLawyers / Licensed

This is held twice a year as a venue for focused discussions on issues related to the transformation of the Canon MJ Group over the medium to longterm, or on urgent management topics, and is attended by all directors, Audit & Supervisory Board members and executive officers. The meetings areheld in an off-site residential format over 1.5 days (*) to provide an opportunity to foster communication between officers. Sometimes study meetings are

Tax Accountants

Business Segments / Group Companies

held for which lecturers, with expertise matching the meeting theme, are invited from outside the Company. In 2021, the meetings resulted in lively
discussion of growth in the IT solutions business, our human resources and investment strategies, and other areas of operations.

Staff Managers*In 2021, due to the impact of the COVID-19 pandemic, the meeting was held online.

Status and Skills Matrix of Directors

Outside /Independent

Period in OfficeAttendance at Board of Directors’Meetings in Fiscal 2021

Corporate Management

Sales & Marketing●

Finance & Accounting

Human Resources

Legal Affairs & Risk
Management

IT Solutions & DX●●

Masachika Adachi

President & Representative Director

7 years★
100% (16/16)●

Minoru Mizoguchi

Director & Senior Vice President

1 year

92% (11/12)*●

Hatsumi Hirukawa

Director & Vice President

2 years

100% (16/16)●

Tsuyoshi Osato

Director & Vice President

-

-

●

Akio Dobashi

Director

6 years

94% (15/16)●●

Yoshio Osawa

Director

4 years

100% (16/16)

●

●

●

Toshiharu Hasebe

Director

-

-

●

●

●

★: Chairperson

57

Skills Matrix

●
●

●
●

●

●

*Attendance at Board of Directors’ meetings for Minoru Mizoguchi is for meetings held after he was elected as a Director at the 53rd Ordinary General Meeting of Shareholders convened on March 26, 2021.

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

58

Canon MJ Group’s Sustainability

Corporate GovernanceInternal Audit
The Internal Auditors Office produces internal audit policies for
Canon MJ and its subsidiaries as an independent specialist thatreports directly to the president. It also conducts audits,
assesses, and advises on all business activities from theperspectives of credibility of financial reports, the validity andDismissal Procedures for Management Team Executives
efficiency of operations, legal compliance, and the conservationof assets.
The auditors of Canon IT Solutions Inc. and Canon System &Support Inc. conduct assessments based on the same policies.
The Canon MJ Group has 50 audit staff members.

Outside Directors and Outside Audit & Supervisory Board Members
Canon MJ has three outside directors and three outside Audit &Supervisory Board members. Pursuant to the consent of all
Audit & Supervisory Board members and the Board of
Directors, we implemented our Standard for outside directors
and outside Audit & Supervisory Board members to clarify forthe independence of outside directors and outside Audit &Supervisory Board members in keeping with the JapaneseCorporate Governance Code and standard.
Our outside directors and outside Audit & Supervisory Board
members satisfy the independence criteria and help maintainand improve the transparency and accountability of the Boardof Directors.

The Company does not maintain a specialist organization orprovide full-time staff to assist outside directors or outside
Audit & Supervisory Board members. Directors in charge of
operations and other officials provide outside directors withprior explanations of Board of Directors’ meeting agendas asneeded. Internal auditors, directors in charge of operations,and other officials provide outside Audit & Supervisory Board
members with prior explanations of Board of Directors’
meeting agendas as needed. Outside Audit & Supervisory
Board members attend Audit & Supervisory Board meetings,
as well as liaison meetings conducted as needed, to exchange
information on important audit details among Audit &Supervisory Board members.

Analysis and Evaluation of Effectiveness of the Board of Directors
We conducted a questionnaire for directors and Audit &Supervisory Board members about the effectiveness of theeven more by further enhancing discussions related to thecomposition of the Board of Directors, monitoring of important

Board of Directors, and analyzed and evaluated theeffectiveness of the Board of Directors. These talks confirmed
the overall effectiveness of the Board of Directors. Goingforward, we will work to ensure and improve the effectivenessprojects, training for management, etc., based on the opinions
of directors and Audit & Supervisory Board members that wereobtained from the questionnaire.

Initiatives to Enhance Corporate Governance
2011

Adopts executive officer system

2016

Compliance with Japanese Corporate Governance Code2014

Appoints one outside director

2018

Sets up Nomination and Remuneration Committee

2016

Increases number of outside directors to two

2021

Compliance with Japanese Corporate Governance Code revisions

2016

Establishes standards for independent outside directors

2022

Increases number of outside directors to three

59

Canon Marketing Japan Inc. I Integrated Report 2021

unsuited to retain their posts as management team executives.
All results of Nomination and Remuneration Committee
deliberations shall be submitted to the Board of Directors,
regardless of the outcome of Board of Directors’ deliberations
on the necessity of dismissal. The management teamexecutives subject to deliberations cannot join in discussions.

Remuneration for Senior Executives and Directors▪ Policies and Procedures for Determining Remuneration
Nomination and Remuneration Committee verifies theappropriateness of the remuneration system for directors
and executive officers who are vice presidents or above,
including ideas on calculating basic remunerations andbonuses and the criteria for granting stock compensationtype stock options. Remunerations are all in line with the
remuneration structure, whose basic calculation approaches
were resolved at meetings of the Board of Directors and areverified by the Nomination and Remuneration Committee.
The total of basic remuneration and stock compensationtype stock options for directors must be less than the
maximum total remuneration approved at general meetingsof shareholders. Bonuses, however, are determined when
proposals for them are approved at ordinary general
meetings of shareholders.

< Members of Nomination and Remuneration Committee >Masachika Adachi 	(Chairperson, President &Representative Director)
Minoru Mizoguchi(Director & Senior Vice President)

Akio Dobashi(Outside Director)

Yoshio Osawa(Outside Director)▪ Composition of Remuneration
Remuneration for the representative director and directors
consists of basic remuneration, which is a fixed basic monthly
fee for executing their roles and duties, a bonus linked toperformance during the fiscal year, and stock compensationtype stock options as incentives to promote improvements inmedium- to long-term business performances and corporate
value. The same applies to remuneration for executive officers,
who are vice presidents or above.
Outside directors only receive basic remuneration.

With regard to the proportion of basic remuneration,bonuses, and stock compensation-type stock options,because we believe that it is important to engage withmanagement from the medium- to long-term perspective,
our basic approach is to emphasize the level and stability ofbasic remuneration. At the same time, with the aim ofenhancing performance over the course of a single fiscal
year, bonuses and stock compensation-type stock options for
directors can account for up to 30% and 20% of basic
remuneration, respectively.

Protection of Minority Shareholders in Transactions with the Controlling Shareholder

Appointment and Nomination Procedures
To nominate director or Audit & Supervisory Board member
candidates and appoint vice presidents (including successors
and candidates for president and representative director), thepresident and representative director first nominatescandidates from among those fulfilling requirements. The

Directors and Audit & Supervisory Board members can ask theNomination and Remuneration Committee for deliberations at
any time to decide whether the dismissal of a representative
director, executive director, or executive officer who is a vicepresident or above (collectively, “management teamexecutives”) is necessary in the event of illegal, unfair, or
treasonous behavior among such individuals, if they have failed
to fulfill their roles, or for other reasons that make such people

nomination is submitted at a meeting of the Board of Directors
after the Nomination and Remuneration Committee confirmsthat it is fair and appropriate.
The Audit & Supervisory Board discusses and consents tonominees before deliberations by the Board of Directors.

The Company’s controlling shareholder is Canon Inc. Importanttransactions with Canon Inc., are deliberated, considered andexecuted by the Board of Directors to ensure that the interestsof minority shareholders of the Company are not damaged,
after appropriately obtaining from independent outside
directors an opinion provided from an objective viewpoint androoted in extensive experience and superior knowledge ofcorporate management and other matters. The Company acts
appropriately and fairly in all transactions, not just those with
its controlling shareholder, to avoid compromising its
independence and interests and to safeguard the interests ofall shareholders.

Canon Marketing Japan Inc. I Integrated Report 2021

60

Canon MJ Group’s Sustainability

Corporate Governance
Relationship with the Parent Company
Our parent company is Canon Inc., whose policy is to list its
subsidiaries on stock exchanges to optimize its consolidated
results, ensuring earnings stability by maintaining theindependence and dynamic management structures of thosecompanies. This approach enhances Group value in keepingwith the interests of all shareholders, including minority ones.
Canon MJ sells and services Canon products. It also sells andservices the products and IT solutions of other entities in
response to customer needs. To develop our own businesses,
we have to make swift decisions, procure funds flexibly, andattract talented people. We are able to do this because we arelisted and operate independently. We thus believe that

Policy on Constructive Dialogue with Shareholders
expanding earnings through our businesses help increase theCanon Group’s corporate value while benefiting shareholders
overall.
The parent company’s involvement in running our organization
is limited to exercising voting rights as a shareholder. No
parent directors hold concurrent positions with us. Half of themembers of our voluntary Nomination and Remuneration
Committee are independent outside directors, ensuringtransparency and fairness. We confirm that transactions with
Canon Inc., such as to determine purchase prices and interest
rates on loans, do not disadvantage either party. We only
implement these transactions after signing contracts.

The Company helps to drive sustainable growth and improve corporate value over the medium and long terms by engaging inconstructive dialogue with shareholders, including through general meetings of shareholders, briefings on management plans forthe medium and long terms, results briefings, and meetings with major institutional investors.

Tackling the COVID-19 Pandemic
We make the health and safety of customers and Canon MJ Group employees our first priority, and have taken the following
preventive steps to maintain business continuity even as infections spread across Japan.

1. Work Practices• Promote teleworking (to limit attendance rate)• Stagger work hours and have people work from satellite offices

Basic Approach to and Preparations for the Exclusion of Antisocial Forces• Ensure that employees practice social distancing, wear masks and wash hands thoroughly, and avoid closed,
crowded, and close-contact settings▪ Basic Policy
The Company and Group companies maintain a resolute approach to antisocial forces that threaten the order and safety of civic
society, and the basic policy is to block all relationships with antisocial forces.

▪ Status of Preparations•T he headquarters general administration department has been designated the Group’s control division in charge of
responding to antisocial forces. It shares information on antisocial forces with the general administration departments of therespective branches and works to prevent transactions, etc. with antisocial forces before they occur.
• A collaborative structure has been built with the police and external organizations such as lawyers.
• Payments of contributions, etc. are examined in advance in order to confirm that there are no problems of legality or
corporate ethics.

Internal Controls

The Internal Controls Evaluation Committee consists ofofficials representing corporate departments andsubsidiaries. Its task is to develop internal controls systems

61

Canon Marketing Japan Inc. I Integrated Report 2021

• Ensure that employees step up health management and swiftly report suspected infections•P romote online meetings with customers, business partners, and employees, and observe the meeting time andensure thorough ventilation when holding in-person meetings• Consider caution in holding in-person face events, etc.

• In addition to setting out action guidelines for the blocking of relationships with antisocial forces, the workplace regulations of
the Company contain provisions to the same effect, and we work to ensure that employees fully comply with these guidelines
and provisions.

Based on the Companies Act, the Board of Directors resolved
the basic policy for an internal controls system to ensure
appropriate business practices, and is deploying that system inline with the policy.

2. Employee Behavior

for the entire Canon MJ Group.
Canon Inc., which is listed on the New York Stock Exchange,
has adopted systems that comply with the Sarbanes-Oxley
Act, a U.S. law designed to improve corporate governance. Asa member of the global Canon Group, Canon MJ has also
applied global perspectives by establishing systems based on
the same standards.

3. Measures at Business Sites• Regularly disinfect office floors and common areas

T O P I C

Measures Against COVID-19 in the Employee Cafeteria
At the employee cafeteria in Canon MJ’s
main office building, in addition tomeasures such as spacing out seats andprohibiting mask-less conversations
while eating, the Company’s network
cameras are utilized and the status ofcrowding is streamed via the intranet inorder to avoid crowding.
Examining the internal effects ofintroduction and accumulating solutions
and know-how will lead to thedevelopment of future solutions.

Status of crowding at cafeteria tables

Level 1 crowding

Level 1 crowding

Canon Marketing Japan Inc. I Integrated Report 2021

62

Canon MJ Group’s Sustainability

Three Way Discussion Among Outside Directors
sales to a variety of customers, from large corporations to

the Canon MJ Group. With a network that extends

small and medium-sized enterprises. The fourth is its

nationwide, I feel that in particular this is a company that has

financial strength. With its robust financial structure, it is in

the ability to make inroads into the workplaces of small andthe position of being able to tackle a variety of challenges at

medium-sized enterprises, to build relationships of trust

any time. The advantage conveyed by the combination of thesewith customers, and to support customers when problems

four strengths is very significant, and I think that thisoccur. I would also focus on technological capability. I sense

advantage enabled Canon MJ to post record profits by

the appeal of its strategy of concentrating on the promotion

capturing the changing needs of customers even during theof security and other IT solutions in recent years. Even when

difficult business environment of the COVID-19 pandemic.

customers find themselves in difficult situations during the

Hasebe: I have just been appointed to this role, in March
2022, but of the strengths highlighted by Mr. Osawa, I am inparticular agreement with him on the sales capabilities ofToshiharu Hasebe

Akio Dobashi

Yoshio Osawa

Outside Director

Outside Director

Outside Director

The Canon MJ Group is an organization from which you can expect
even greater growth, and we will support that growth going forward.
Outside Directors Akio Dobashi and Yoshio Osawa, together with newly appointed director Toshiharu Hasebe, met to discuss thestrengths of the Canon MJ Group, its potential for growth, its approach to governance, and the effectiveness of its Board of Directors.

Our Corporate Culture and Strengths

Dobashi: It has been six years since I was first appointed
Outside Director of Canon MJ, and the impression I haveformed is that of a company of great seriousness andintegrity. When I first came on board, the Group was in the
middle of a major project, which was the construction of adata center. This was discussed frequently by the Board of
Directors, and I remember being struck by the seriousness

Osawa: I agree with this. Four years have passed since I was
appointed to this role, and my impression is that of a company
that treats its employees like family, and with kindness. Even
during discussions on the Board of Directors, I invariably feelthat the Company takes considerate attitude to its employees.

and the integrity of the person in charge of negotiations with

I think the Canon MJ Group has four major strengths. The first

the general construction company that was the leadingis the power of its brand. Based on the global Canon brand, it

candidate to receive this order.

has been able to build extraordinarily positive relationships of

There are also many opportunities for discussion, such as on
the Management Committee, the Directors Agenda Meeting,and the Business Report Meeting, and I feel that Canon MJ
has a culture of respecting and listening to diverse opinions. I
had previously thought that the internal culture was open andencouraged a liberal approach to the exchange of opinions,63

but recently I feel that this has been taken a step further.

Canon Marketing Japan Inc. I Integrated Report 2021

trust with customers and business partners. The second istechnological capability. Not only are there approximately
4,000 system engineers in the Canon MJ Group, but also,
when problems occur, its nationwide network of service
engineers enables personnel to be quickly dispatched to thesales capabilities that enable it to resolve their issues using
new technology in IT solutions, including security.

Future Growth and Issues- Please share with us your thoughts on the future growth of the Canon MJ Group, and the associated issues that it faces.
Dobashi: I have no objection to pursuing new growth bybusiness model. At this point priority is being given to large

focusing the expansion of operations on the ITS business, andcorporations, quasi-major and upper medium-sizedin fact I have high hopes for this course of action.As Mr. Osawa

enterprises, but I am hopeful that the Group will develop its

says, the financial base of the Canon MJ Group is sufficiently

business among small and medium-sized enterprises goingrobust to allow it to be bold in its risk-taking, so in preparation

forward. I believe it is perfectly feasible for an organization likefor future expansion, the Group should take an even more

Canon MJ Group to leverage its natural strengths to change its

active approach to investments for growth than it has in theexisting business, which is centered on hardware sales, and I

past. I come from a trading company background, and it isexpect that this will open the way to rapid growth in the future.

partly because I am informed by that perspective that I have

- What is your perception of the Canon MJ Group’s corporate culture and strengths?

COVID-19 crisis, I believe that it is the Company’s inherent

consistently argued for this since I was first appointed Director.
I am seeing the Company move in this direction, albeit little bylittle. I will continue to make this argument going forward.
The issue going forward will be speed. Now in particular,social conditions are changing dramatically and this requires
prompt decision-making. I would like to see an emphatic
response from the Company on this issue.

Hasebe: Speaking from my own experience as somebody
who has worked in the telecommunications industry formany years, IT solution services is an extraordinary
important area, and one to which I feel Japanese companies
should devote more resources.
The Canon MJ Group has not only sales capabilities at thenational level but also the ability to resolve issues at thecustomer level, so if it can combine existing fields with the

Osawa: There are certainly plenty of opportunities forpromotion of new security and DX offerings, it should be able todiscussion, and I am very satisfied with the feedback we haveprovide packaged services. As Mr. Osawa points out, it is likely

received on business activities and with the properthat such services will help resolve issues such as the new

explanations we have been given ahead of meetings.

normal and work practice reforms for small and medium-sized

Nevertheless, when moving forward with efficiency

enterprises that emerged during the COVID-19 pandemic.

improvements and process modifications, it is also
necessary to arrange matters so that resolutions are taken
via as simple a procedure as possible. I agree with Mr.
Dobashi that speed is of paramount importance.

From the perspective of investments for growth, which Mr.
Dobashi mentioned, it is essential that the Group invests inand collaborates with startups and upper medium-sizedenterprises. On that point, I hope to leverage my own priorcustomer site and resolve the issue. By utilizing the sales

In addition, the Canon MJ Group is currently promoting aexperience to engage actively in discussions aimed at

network it has established, Canon MJ has a track record ofgrowth strategy that is centered on the shift to a service-based

moving forward with a sense of urgency.

Canon Marketing Japan Inc. I Integrated Report 2021

64

Canon MJ Group’s Sustainability

Three Way Discussion Among Outside Directors
Governance and the Effectiveness of the Board of Directors- What is your assessment of the governance of the Canon MJ Group, and the effectiveness of the Board of Directors?

the perspective of ESG and the SDGs. I would like to lookintend to actively participate in discussions as an Outside

more carefully not only at the profit of the Canon MJ Group

Director, taking past experience into account, and contributebut also at whether an investment benefits society, share theto the forming of a consensus for course of actions over theoutcomes, and deepen discussions in the Board of Directors.

medium to long term.

The opinions of the three Outside Directors sitting here are

Akio Dobashi
Worked at Sojitz Corporation and Sojitz Holdings Corporation.
Serves concurrently as Outside Director of Maeda Corporation.
Appointed Director of the Company in March 2016.

Dobashi: What I feel as a result of six years of experience inalways respected by the Board of Directors, and I believe thatthe role of Outside Director is that this is a company group

Board of Directors governance is functioning effectively.

without governance problems. Since being appointed, noHasebe: When I was appointed Outside Director, I received a

serious compliance problems that would be condemned bynumber of explanations from the person in charge. Evensociety have arisen. Even when looking at the results of theoutside the Board of Directors, I was shown the schedules forquestionnaire into the effectiveness of the Board of

the holding of gatherings for important discussion and sharing

Directors, I see that this area scores high marks. As forof information, such as the Management Committee and thediversity on the Board of Directors, this is an issue that will

Business Report Meeting. On the Company’s side, the intention

require continuous consideration going forward, but myis for us Outside Directors to participate as frequently as timeperception is that it has ensured effectiveness. Basically,

allows and to thus deepen our understanding, and this gives

many of the proposals that come before the Board ofme a strong sense of the Company’s commitment to soundDirectors have already been thoroughly discussed at theand transparent management. I myself would like to use theManagement Committee or other meetings, and so theopportunity presented by such gatherings to engage in a

Board of Directors does not drift into situations where it isvariety of discussions.

unable to come to an opinion. I myself think that is the way
the Board of Directors should operate.

The Canon MJ Group has devised a course of action forgrowing in new areas of business such as IT solutions, but

Toshiharu Hasebe
Worked at Nippon Telegraph and Telephone Public Corporation,
NTT Communications Corporation, NTT Advertising, Inc., NTT

Osawa: From the perspective of governance, the Company

there will probably be issues that it will be unable to judge

Publishing Co., Ltd., Nippon Computer Arts, Inc. and DX

must above all fulfill its responsibility to properly explain thebased solely on the experience and knowledge the Group has

Catalyst Inc. Appointed Director of the Company in March 2022.

appropriateness of the so-called “listed parent andaccumulated so far. In response to any such issues, I myself

Expectations and Ideas for the Future of the Canon MJ Groupsubsidiaries” situation. You have Canon MJ, which is a listed
subsidiary of Canon Inc., and below that you have various- Finally, please share with us your expectations and ideas for future of the Canon MJ Group.

other subsidiaries. The Company must be able to provide
proper explanations of why this structure is appropriate to
institutional investors and minority shareholders.

Osawa: I have already mentioned this, but the Canon MJ

customers to provide them with support, and I feel that thisI am in agreement with Mr. Dobashi on the effectiveness ofGroup is currently forging ahead with the transformation of

approach plays an extremely important role in resolving thethe Board of Directors, but more than anything else, by

its business model with the aim of shifting to the provision ofissues faced by society and the economy as a whole. This

clearly expressing our opinion on proposals that touch upon

total solution services by making use of IT. I have high hopes

also links to the achieving of Canon MJ Group’s 2025 Vision,

the appropriateness of having both parent and subsidiarythat if the Canon MJ Group fully exerts its capabilities, it

and furthermore to the Canon Group’s corporate philosophy

listed, we are working to demonstrate the restraining

should be able to achieve further growth. The Board ofof Kyosei, and the Group shows a renewed commitment tofunction of governance.

Directors has discussed various aspects of the issues it will

future growth.

face going forward and how to address them. I would like toWith regard to agenda items for the Board of Directors, as

continue offering a range of advice as Outside Director withmentioned by Mr. Dobashi in his comments, discussions are

regard to measures to resolve these issues with a greater

often worked out in advance at the Management Committee,
and investment projects are tabled after discussion at the IT

resources.

achieved through continuously doing “good work” andthrough having that acknowledged by customers. It is
important to always take care of the customer, and build up

investment committee, and so on. However, I believe we must

Worked at Sumitomo Corporation and SCSK Corporation.

look again at these from the standpoint of Outside Directors

Serves concurrently as Outside Director of Citizen Watch Co.,

Hasebe: We are in an era of social upheaval, and customers’

enable it to continue to be such a company, I intend toand ask ourselves whether an investment is appropriate from

Ltd. Appointed Director of the Company in March 2018.

businesses are also undergoing tremendous change. The

diligently fulfill my duties as Outside Director.

the viewpoint of society and the economy, and moreover from65

Yoshio Osawa

sense of urgency, including the securing of additional human

Dobashi: I believe that the sustainability of a company isCanon Marketing Japan Inc. I Integrated Report 2021

work that benefits the customer, one piece after another. To

Group has a business model of interacting closely with

Canon Marketing Japan Inc. I Integrated Report 2021

66

Data

10-Year Consolidated Financial Summary
Millions of yen

Thousands of U.S. dollars(Note 1)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2021

¥ 659,218¥ 657,215¥ 659,432¥ 646,002¥ 629,313¥ 632,189¥ 621,591¥ 621,134¥ 545,060¥ 552,085$ 4,800,739

Operating income

16,802

17,01225,087

26,647

27,67630,40628,941

32,43931,317

39,699345,209

Net income before income taxes

17,52817,05425,85827,49728,90330,91830,70833,302

33,46343,094

374,730

Net income attributable to owners of the parent

10,578

10,167

16,03015,67018,161

20,67920,82622,25021,99729,420255,826

Equity254,088257,075

270,352

277,438

280,919

297,522

303,570

325,092

346,114374,676

3,258,052

Total assets

462,574

467,076

479,747

486,502497,727

510,832

498,790503,698

506,604

526,418

4,577,548

Cash flows from operating activities

33,76728,78038,19029,73033,30628,885

16,99022,05238,49032,756284,835

Cash flows from investing activities(16,066)(25,757)(15,221)(44,536)(19,460)

7,963(10,526)(94,584)(26,174)(15,894)(138,209)

Cash flows from financing activities(11,813)(9,105)(4,544)(6,224)(6,086)(7,145)(7,838)(8,557)(6,587)(9,160)(79,652)

Cash and cash equivalents at end of year

108,259

102,182

120,607

99,573

107,285

136,979

135,571

54,49360,131

68,028591,548

For the year:
Net sales (Note 4)

At year-end:

Cash flows:

U.S. dollars(Note 1)Yen

Per share of common stock:
EquityNet income¥ 1,907.50¥ 1,980.22¥ 2,082.60¥ 2,136.22¥ 2,162.96¥ 2,290.70¥ 2,336.97¥ 2,502.39¥ 2,664.20¥ 2,883.74$ 25.08

77.45

76.67

123.62120.84140.06

159.48160.61

171.60169.65226.88

1.97

24.00

24.00

40.00

45.00

50.00

60.00

60.00

60.00

60.00

75.00

0.65

(Note 2)

Cash dividends(Note 3)

Notes: 1. The figures have been presented in U.S. dollars by translating all Japanese yen amounts at ¥115 to U.S.$1, the prevailing exchange rate as of December 31, 2021.
2. Net income per share is based on the weighted-average number of shares of common stock outstanding during the respective fiscal years.
3. Cash dividends per share are the amounts applicable to the respective fiscal years, including dividends to be paid after the end of the respective fiscal years.
4. Effective fiscal 2013, we have changed to an accounting method that deducts a portion of sales incentives (which had previously been accounted for under selling, generaland administrative expenses) from net sales; therefore, the amount of net sales for fiscal 2012 and relevant key management indicators have been adjusted retroactively.

Net Sales and Return on Sales (ROS)■■ Net Sales◦ ROS(Billions of yen / %)659 657 659 646

Operating Income and Operating Margin

Working Capital■■ Operating Income◦ Operating Margin(Billions of yen / Times)(Billions of yen / %)

39.6

5.3

3.3

3.4

3.6

2.9

25.0

3.8

1.5

67

‘14

‘15

‘16

‘17

‘18

‘19

30.4

28.9

(Billions of yen / %)■■ Total Stockholders’ Equity◦ ROE(Billions of yen / %)■■ Total Assets◦ T otal Stockholders’ Equity Ratio

Net Income Attributable to Owners of the Parent(Billions of yen)

‘20

‘21

Canon Marketing Japan Inc. I Integrated Report 2021

2.5

2.6

‘12

‘13

‘14

4.1

‘15

4.4

‘16

340 348

362

3.5

4.8

4.7

5.2

5.7

1.9

2.0

2.1

2.2

2.3

‘18

‘19

‘20

‘21

‘12

‘13

‘14

‘15

‘16

254 257280
270 277

2.5

163 165 165 160 157 157

‘17

3.7

3.1

‘17

29.4

374

396
398 387
377 380

3.0
7.2

16.8 17.0

2.4

‘13

26.6

27.6

317 325

32.4 31.3

4.0

2.4

‘12

■■ Total Current Assets■■ Total Current Liabilities◦ Current Ratio

Total Assets and Total Stockholders’ Equity Ratio

629 632 622 621
545 552

1.6

Total Stockholders’ Equity and ROE

4.2

4.0

‘12

‘13

6.1

5.7

‘14

‘15

6.5

297 303324

345

498 511 499 504 507
480 487
463 467526
20.6 20.8

7.2

8.2
6.9

7.1

6.6

22.2 21.9

18.1
60.8 64.4
54.9 55.0 56.3 56.9 56.4 58.1

68.2 71.0

16.0 15.6
10.5 10.1

130 120
108 107

‘18

‘19

‘20

‘21

‘16

‘17

‘18

‘19

‘20

‘21

‘12

‘13

‘14

‘15

‘16

‘17

‘18

‘19

‘20

‘21

‘12

‘13

‘14

‘15

‘16

‘17

‘18

‘19

‘20

‘21

Canon Marketing Japan Inc. I Integrated Report 2021

68

Data

Consolidated Balance Sheet
Canon Marketing Japan Inc. and Consolidated Subsidiaries
December 31, 2021
(Millions of yen)

2021

2020

ASSETS

Notes and accounts receivable-trade (Notes 7 and 23)

2021

2020

¥ 46,323¥ 44,107

52

54

LIABILITIES AND EQUITYCURRENT ASSETS:
Cash and cash equivalents (Notes 6 and 23)(Millions of yen)

CURRENT LIABILITIES:¥ 68,028¥ 60,131

107,367

105,328

Current portion of long-term lease obligations (Notes 12 and 23)

Notes and accounts payable-trade (Note 23)

Inventories (Note 8)

35,23627,826

Accrued income taxes (Note 18)

6,954

7,004

Short-term loans receivable (Note 23)

180,004

180,006

Consumption taxes payable

6,089

5,547

5,469

7,122

Accrued expenses

16,127

16,166(24)(66)

Accrued bonuses

4,148

5,664

396,082

380,349

Accrued directors’ bonuses

98

75

Accrued product warranties

291

453

Land

28,35928,359Accrued loss on contracts (Note 8)308

8

Buildings and structures

74,94569,904

Other current liabilities

Machinery and vehicles

166

166

Total current liabilities

Furniture and fixtures

16,092

16,266

LONG-TERM LIABILITIES:

Rental assets

36,73538,177

Other current assets
Allowance for doubtful receivables
Total current assets
PROPERTY, PLANT AND EQUIPMENT:

Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

39

78

2,392

1,577

158,732

154,532(73,578)(70,802)85,154

83,729

6,226

5,373

INTANGIBLE ASSETS:
Software—1

Utilization rights

303

294

Total intangible assets

0

0

6,530

5,669

17,353

11,302INVESTMENTS AND OTHER ASSETS:
Investments in securities (Notes 9 and 23)
Long-term loans receivable3535

Prepaid pension and severance costs (Note 14)

421

415

Lease deposits (Note 10)

2,961

3,427

Deferred tax assets (Notes 3 and 18)

14,974

19,219Other investments and other assets

2,999

2,659

Allowance for doubtful receivables

(95)

(205)

38,65136,855¥ 526,418¥ 506,604

Total investments and other assets
Total assets (Note 28)

29,356
108,440

81

74

Deferred tax liabilities (Note 18)—

1

Allowance for long-term continuous service rewards

899

951

Accrued pension and severance cost (Note 14)

40,91347,883

Other long-term liabilities (Note 12)

2,738

3,139

44,632

52,04973,30373,303

Total long-term liabilities
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 15 and 22)

Lease assets
Other intangible assets

Long-term lease obligations (Notes 12 and 23)

26,715
107,109

EQUITY:SHAREHOLDERS’ EQUITY (Notes 16 and 17):
Common stock:
Authorized 299,500,000 shares; issued 131,079,972 and 131,079,972 as of December 31,
2021 and 2020, respectively
Capital surplus

82,82482,814Retained earnings

208,824

188,481(2,092)(2,103)362,859

342,495

7,873

4,230

22

(29)

Treasury stock, at cost; 1,404,790 shares in 2021 and 1,412,822 shares in 2020
Total shareholders’ equity
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on available-for-sale securities
Deferred gain (loss) on derivatives under hedge accounting
Foreign currency-translation adjustments
Defined retirement benefit plans
Total accumulated other comprehensive income (loss)
NON-CONTROLLING INTERESTS
Total equity
Total liabilities and equity

125

5

3,067

(1,243)

11,089

2,962

727

655

374,676

346,114¥ 526,418¥ 506,604• See accompanying notes to consolidated financial statements.

69

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70

Data

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2021

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2021
(Millions of yen)NET SALES (Note 28)
COST OF SALES (Notes 8 and 19):
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Notes 19 and 20):
Operating income (Note 28)

2021

2020

¥ 552,085¥ 545,060

361,809

361,077(Millions of yen)

NET INCOME

190,276

183,982

Unrealized gain (loss) on available-for-sale securities

152,665

Deferred gain (loss) on derivatives under hedge accounting

39,69931,317

Foreign currency-translation adjustments
Defined retirement benefit plans

Interest and dividend income

558

398

Interest expense

(12)

(12)

Comprehensive income

Insurance income

506

452

COMPREHENSIVE INCOME ATTRIBUTABLE TO:

(6)

(5)

Gain on investments in partnership

278

231

Subsidies for employment adjustment under COVID-19

—

2,744

Gain on sales of long-lived assets (Note 21)6283

Foreign exchange losses

Insurance income due to disaster (Note 21)
Gain on sales of investments in securities (Note 9)

202

—

1,255

278

Gain on sales of shares of subsidiaries and associates

895—

Loss on sales of shares of subsidiaries and associates

(40)

(737)

Loss on sales and disposal of long-lived assets (Note 21)(124)(1,021)

Loss on disaster (Note 21)

(168)

—

Loss on impairment of investments in securities (Note 9)

(18)

(316)

Loss on COVID-19 (Note 21)

—

(274)

Other, net

63

126

Total other income (expenses)

3,395

2,145

Net income before income taxes

43,09433,463

12,971

12,5252020¥ 29,495¥ 22,071

3,643

302

51

(40)

OTHER COMPREHENSIVE INCOME (LOSS) (Note 26):

150,576

OTHER INCOME (EXPENSES):

2021

Total other comprehensive income (loss)

Owners of the parent
Non-controlling interests

137

(56)

4,311

5,253

8,144

5,459

¥ 37,640¥ 27,530¥ 37,547¥ 27,464

93

66• See accompanying notes to consolidated financial statements.

INCOME TAXES (Note 18):
Current
Deferred
Total income taxes
Net income

627(1,133)

13,598

11,39229,49522,071NET INCOME ATTRIBUTABLE TO:
Non-controlling interests
Owners of the parent
Net income

75

73

29,42021,997¥ 29,495¥ 22,071(Yen)

PER SHARE DATA (Note 27):
Net income attributable to owners of the parent-Basic¥ 226.88¥ 169.65-Diluted

226.83169.62

75.00

60.00

Cash dividends applicable to the year
• See accompanying notes to consolidated financial statements.

71

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72

Data

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2021

Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2021
(Millions of yen)(Thousands of shares / Millions of yen)

2021

2020

Net income before income taxes¥ 43,094¥ 33,463

Depreciation and amortization

Shareholders’ equity
Common stock

Balance at January 1, 2020

SharesAmount151,079¥ 73,303

Capital surplus

Retainedearnings

SharesAmountTotal
shareholders’equity¥ 82,820¥ 202,783(21,413)¥ (31,926)¥ 326,979

Treasury stock

CASH FLOWS FROM OPERATING ACTIVITIES:
10,246

11,253

(242)

(179)

Cash dividends

—

—

—

(6,483)——(6,483)

Increase (decrease) in allowance for doubtful receivables

Net income attributable to owners of the parent

—

—

—

21,997——21,997

Increase (decrease) in accrued pension and severance costs

(544)

2,028

Purchase of treasury stock

—

—

—

—

(1)

(2)

(2)

Decrease (increase) in prepaid pension and severance costs

(45)

(19)

Disposition of treasury stock

—

—

1

—

2

3

4

Increase (decrease) in accrued bonuses(1,486)

2,323

Cancellation of treasury stock(20,000)—(29,822)—

20,00029,822—

Transfer from retained earnings to capital surplus——

29,815(29,815)———

Loss (gain) on sales and disposal of property, plant and equipment, net

111

(150)

Net income attributable to non-controlling interests

—

—

—

—

—

—

—

(1,255)(278)

Cash dividends paid to non-controlling interests

—

—

—

—

—

—

—

18

316

Net change in the year

—

—

—

—

—

—

—

(855)

737

Balance at January 1, 2021

131,079

73,30382,814

188,481(1,412)(2,103)

342,495

Loss (gain) on sales of investments in securities
Loss on impairment of investments in securities
Loss (gain) on sales of shares of subsidiaries and associates
Loss (gain) on investments in partnership

(278)

(231)

(1,987)

5,276

Cash dividends

—

—

—

(9,076)——(9,076)

Decrease (increase) in notes and accounts receivable-trade

Net income attributable to owners of the parent

—

—

—

29,420——29,420Decrease (increase) in inventories(7,467)

5,357

Purchase of treasury stock

—

—

—

—

(1)

(2)

(2)

Increase (decrease) in notes and accounts payable-trade

2,222(6,262)

Disposition of treasury stock

—

—

9

—

9

13

23

Income taxes paid

(13,103)(13,574)

Net income attributable to non-controlling interests

—

—

—

—

—

—

—

Cash dividends paid to non-controlling interests

—

—

—

—

—

—

—

Other, net

4,330(1,571)

Net change in the year

—

—

—

—

—

—

—

32,75638,490131,079¥ 73,303¥ 82,824¥ 208,824(1,404)¥ (2,092)¥ 362,859(14,587)(14,695)

Balance at December 31, 2021

(Millions of yen)

Accumulated other comprehensive income (loss)
Unrealized
gain (loss) on
available-forsale securities
Balance at January 1, 2020

Deferredgain (loss) on
derivatives
under hedge
accounting

Foreigncurrencytranslation
adjustments

Definedretirement
benefit plans

Total
accumulated Non-controllinginterests
othercomprehensive
income (loss)

Total equity

Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:Payments for purchases of property, plant and equipment

18

1,010

Payments for purchases of intangible assets(2,242)(3,729)Payments for purchases of investments in securities(1,089)(310)

Proceeds from sales of investments in securities

1,893

697

Proceeds from sales of property, plant and equipment

Proceeds from sales of shares of a subsidiary resulting in change in scope of consolidation
Decrease (increase) in short-term loans receivable, net
Other, net¥ 3,929

¥ 11

¥ 51

¥ (6,497)¥ (2,504)¥ 616¥ 325,092

Cash dividends

—

—

—

—

—

—

(6,483)

Net cash used in investing activities

Net income attributable to owners of the parent

—

—

—

—

—

—

21,997

CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of treasury stock

—

—

—

—

—

—

(2)

Disposition of treasury stock

—

—

—

—

—

—

4

Cancellation of treasury stock

—

—

—

—

—

—

—

Transfer from retained earnings to capital surplus

—

—

—

—

—

—

—

Net income attributable to non-controlling interests

—

—

—

—

—

73

73

Cash dividends paid to non-controlling interests

—

—

—

—

—

(26)

(26)

Net change in the year

301

(40)

(46)

5,253

5,467

(7)

5,459

Balance at January 1, 2021

Repayments of finance lease obligations
Payments for purchases of treasury stock
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

847

828

2

(9,994)(737)

19(15,894)(26,174)

(61)

(72)

(2)

(2)

(9,073)(6,485)

(21)

(26)

—

0

(9,160)(6,587)

195

(91)

7,897

5,637

4,230

(29)

5

(1,243)

2,962

655

346,114

Cash dividends

—

—

—

—

—

—

(9,076)

Net increase (decrease) in cash and cash equivalents

Net income attributable to owners of the parent

—

—

—

—

—

—

29,420Cash and cash equivalents at beginning of year

60,13154,493Purchase of treasury stock

—

—

—

—

—

—

(2)

Disposition of treasury stock

—

—

—

—

—

—

23

Cash and cash equivalents at end of year (Note 6)¥ 68,028¥ 60,131

Net income attributable to non-controlling interests

—

—

—

—

—

75

75

Cash dividends paid to non-controlling interests

—

—

—

—

—

(21)

(21)

Net change in the year

3,642

51

120

4,311

8,126

17

8,144

Balance at December 31, 2021

¥ 7,873

¥ 22

¥ 125

¥ 3,067¥ 11,089¥ 727¥ 374,676• See accompanying notes to consolidated financial statements.
• Certain changes in presentation have been made in the consolidated statement of cash flows of the previous year to conform to the presentation of
the current year.

• See accompanying notes to consolidated financial statements.

73

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74

Data

Notes to Consolidated Financial Statements
Canon Marketing Japan Inc. and Consolidated Subsidiaries
Year Ended December 31, 2021

1

Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Canon Marketing Japan Inc. (the “Company”) and its consolidated subsidiaries(the “Group”) are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial
statements prepared by the Company as required by the Japanese Financial Instruments and Exchange Act. Certain accounts and items
presented in the original consolidated financial statements in Japanese have been reclassified for the convenience of readers outside ofJapan.
Japanese yen figures less than a million yen are rounded down to the nearest million yen, except for per share data, from the beginning of
2021. Accordingly, such change in presentation has also been reflected to the amounts for the year ended December 31, 2020.

2

Summary of Significant Accounting Policies(g) Long-Lived Assets
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amount of anasset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds
the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset
group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount,which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at
disposition.
(h) Intangible Assets, Excluding Lease Assets
Software for sales is depreciated by the amount larger of the depreciation calculated based on the estimated sales quantity or the estimatedsales revenue, or the depreciation calculated based on the straight-line method using the estimated effective duration of sales up to 3
years. Internal-use software is depreciated by the straight-line method based on the length of in-house durability of 5 years.

(a) Principles of Consolidation(i) Investments in Securities

The accompanying consolidated financial statements for the year ended December 31, 2021, include the accounts of the Company andall of its 14 (17 in 2020) subsidiaries. The changes include sale of shares in Edifist Learning Inc., sale of equity interests in MAT Vietnam
Company Limited and liquidation of ASAHI-M.A.T. Co., LTD. All significant intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profit included in assets resulting from transactions within the Group is also eliminated. The Company
does not have any associated companies accounted for using either equity method or cost method. All consolidated subsidiaries have thesame balance sheet date as the consolidated balance sheet date.

Investments in securities consist of debt and equity securities. Held-to-maturity debt securities are stated at amortized cost. Available-forsale marketable securities are stated at fair market value, with unrealized gain or loss, net of the applicable taxes, reported as a separate
component of equity, and costs of securities sold are determined by the moving-average method. Available-for-sale securities whose fairvalue is not readily determinable are stated at cost determined by the moving-average method.

(b) Cash Equivalents
The Company and its consolidated subsidiaries consider all highly liquid investments, including time deposits and certificates of deposit, allof which mature or become due within three months of the date of acquisition, to be cash equivalents.

(j) Accrued Bonuses
The estimated payment for current year’s portion of employees’ bonus is recorded based on the projected payments.
(k) Accrued Directors’ Bonuses
The estimated payment for current year’s portion of director’s bonus is recorded based on the projected payments.

(c) Inventories
Merchandise and service parts are valued at cost determined by the monthly moving-average method. The carrying amount in the
consolidated balance sheet represents the amount after write-downs due to decreased profitability.
Work in process is valued at cost determined by the specific identification method. Supplies are valued at cost determined by the lastpurchase price method. The carrying amount in the consolidated balance sheet represents the amount after write-downs due to decreased
profitability.

(l) Accrued Product Warranties
Costs arising from a one-year free warranty contract for consumer products are recorded based on the past experiences of free repairs.
Also, at certain subsidiaries, the future payment for free program maintenance and repairs are estimated and accrued for based on thehistorical figures.
(m) Accrued Loss on Contracts(d) Allowance for Doubtful Receivables
To cover possible losses on collection, an allowance for receivables with higher risk of collectability is estimated on an individual basis. For
all other receivables, an allowance is calculated based on the past experiences of uncollected amount.

To cover possible future losses on contracts in progress at the end of the current year, if the occurrence of loss is probable and the loss
amount can be reasonably estimated as of the end of the year, the amount of losses expected to be incurred in the following year andthereafter is recorded.

(e) Property, Plant and Equipment, Excluding Lease Assets(n) Allowance for Long-Term Continuous Service Rewards

Property, plant and equipment, excluding lease assets, are stated at cost. Depreciation is computed by the declining-balance method forproperty and equipment, with the exception of items that are depreciated by the straight-line method at rates based on the estimated useful
lives of the respective assets. Such items are rental assets, certain assets of consolidated subsidiaries, buildings purchased on or after
April 1, 1998, exclusive of building improvements, and building improvements and structures purchased on or after April 1, 2016.

The estimated payment is recorded in order to cover payment of rewards to employees in accordance with internal regulations on longterm continuous service.

The useful lives are as follows:
Buildings and structures, from 3 years to 75 years; furniture and fixtures, from 2 years to 20 years; and rental assets, 3 years.
(f) Leases(1) Finance lease transactions—Lessees’ accounting	Leases that meet criteria including transfer of ownership is recorded as assets. Such lease transactions mainly involved servers used in
the Company’s IT system and software.

(o) Accounting Method for Retirement Benefits(1) Method of attributing estimated amounts of retirement benefits to periods
	In calculating retirement benefit obligations, the estimated amount of retirement benefits attributed to a period up to the current year is
primarily determined using the benefit formula basis.
(2) Amortization of unrecognized actuarial gains and losses and prior service cost	Unrecognized prior service cost is amortized by the straight-line method over the average remaining service period of the eligible
employees for past service when occurred. Unrecognized actuarial gains and losses are amortized from the year following the year inwhich they arose by the straight-line method over the average remaining service period of the eligible employees.

(2) Accounting method for depreciation of lease assets
	Lease assets under finance lease contracts are depreciated by the straight-line method over their respective lease contract term withzero residual value.

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Canon Marketing Japan Inc. I Integrated Report 2021

(3) Application of simplified method at smaller-sized companies
	Certain consolidated subsidiaries apply the simplified method for calculating accrued pension and severance costs and net periodic
benefit costs. Under this method, the payments for voluntary early retirement of all eligible employees at the end of the year are
recognized as retirement benefit obligations.

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Data
Notes to Consolidated Financial Statements(p) Income Taxes(v) Key Hedge Accounting Methods

The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted
income tax rates to the temporary differences.

(1) Hedge accounting method(q) Translation of Foreign Currency Accounts	Accounts payable denominated in foreign currencies for which foreign exchange forward contracts are used to hedge the foreign
currency fluctuations is translated at the contracted rate if the forward contracts qualify for hedge accounting.
(2) Hedging instrument and Hedged item	Hedging instrument—Forward exchange contracts
Hedged item—Foreign currency-denominated payables

All short-term and long-term receivables and payables denominated in foreign currencies are translated into Japanese yen at the current
exchange rates in effect at the consolidated balance sheet date except for foreign currency-denominated payables covered by exchange
contracts for hedge purpose. The foreign exchange gains and losses on translation are recognized in the accompanying consolidated
statement of income.

(3) Hedging policy(r) Translation of Subsidiaries’ Financial Statements Prepared in Foreign Currency

	The Company hedges the risk of changes in foreign currency-denominated payables’ Japanese Yen equivalent cash flow attributable tochanges in the related foreign currency exchange rates.

The consolidated balance sheet accounts of the foreign subsidiaries are translated into Japanese yen at the current exchange rates in effectat the consolidated balance sheet date, except for the components of equity, excluding non-controlling interests, which are translated attheir historical exchange rates.

(4) Hedging effectiveness

Revenue and expense accounts are translated at the average exchange rates prevailing during the year.

	The Company does not assess hedge effectiveness at year-end because hedging instrument and hedged item have the same currency,
amount, and due date in accordance with the Company’s hedging policy.

(s) Per Share Amounts(w) Other Significant Matters for Preparing Consolidated Financial Statements

Basic earnings (net income attributable to owners of the parent) per share is computed based on the weighted-average number of shares ofcommon stock outstanding during each period. The computation of diluted earnings per share reflects the maximum possible dilution fromexercise of option.

(1) Accounting for consumption taxes

Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective
years, including dividends to be paid after the end of the respective years.

	Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes in the consolidated statement ofincome.
(2) Application of consolidated taxation system(t) Standards for Recognizing Significant Revenues and Expenses
The Group adopted Accounting Standards Board of Japan (ASBJ) Statement No. 29, “Accounting Standard for Revenue Recognition”, March
30, 2018, and ASBJ Guidance No. 30, “Implementation Guidance on Accounting Standard for Revenue Recognition”, March 30, 2018. The
normal timing for recognizing key performance obligations and revenues in core businesses is as follows.
The Group sells and provides services for Canon products. It also provides products and services in the IT solutions and industrial
equipment and healthcare fields. For sales of offerings that do not require customer acceptance inspections, customers normally obtain
control of products upon delivery. The Group’s performance obligations are thereby deemed fulfilled, and revenue is recognized upon
product delivery. Services mainly entail maintenance agreements, and revenue is recognized evenly over the lengths of these agreements
or, in accordance with the extent of product usage, based on amounts determined in those agreements.
Each reporting segment has unique revenue recognition methods, as outlined below. As the Enterprise and Area segments provide similar
products and services, their revenues are stated collectively.

The Company and certain consolidated subsidiaries have adopted the consolidated taxation system.
(3) Application of tax effect accounting for the transition from the consolidated taxation system to the group tax sharing system	The Company plans to shift from current consolidated taxation system to group tax sharing system which is to be established in thenear future. With regard to differences under the group tax sharing system established by Act on Partial Revision of the Income Tax Act(Act No. 8, 2020) and differences under the single tax return filing system reexamined together with transition to the group tax sharing
system, the Company and certain consolidated subsidiaries calculate the amounts of deferred tax assets and deferred tax liabilities
based on the Income Tax Act before the revision, not applying Paragraph 44 of ASBJ Guidance No. 28, “Implementation Guidance on Tax
Effect Accounting”, February 16, 2018, as permitted by Paragraph 3 of the PITF No. 39, “Practical Solution on the Treatment of Tax EffectAccounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System”, March 31, 2020.
(x) New Accounting Pronouncements

Consumers segment(Accounting Standard and Implementation Guidance on Revenue Recognition)

Sales are measured at discounted prices pledged in agreements with customers, net of rebates and other factors in line with sales.
Estimates are based on past trends and other known factors at times of sale. Sales are recognized to the extent that significant reversals
are unlikely.

ASBJ Statement No. 29, “Accounting Standard for Revenue Recognition”, March 31, 2020
ASBJ Guidance No. 30, “Implementation Guidance on Accounting Standard for Revenue Recognition”, March 26, 2021

Enterprise and Area segments
For product repairs and installations and other services, sales are recognized when it is deemed that services have been completed in
keeping with performance obligations. Contract development software sales are recognized based on input methods for software for which
the progress can be reasonably estimated. If it is not possible to reasonably estimate the progress, sales are recognized based on cost
recovery methods for software where costs are incurred in accordance with progress and are assessed as recoverable.
Professional segment
Where equipment performance is subject to customer acceptance inspections, sales are recognized upon such acceptance inspections.
(u) Research and Development Costs
Research and development costs are charged to income as incurred.

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Canon Marketing Japan Inc. I Integrated Report 2021

(1) Summary
ASBJ established the requirements for presentation and disclosure related to revenue recognition.
(2) Scheduled application date
The Group plans to apply the relevant accounting standards from the beginning of the year ending December 31, 2022.
(Accounting Standard for Fair Value Measurement and other)
ASBJ Statement No. 30, “Accounting Standard for Fair Value Measurement”, July 4, 2019ASBJ Statement No. 9, “Accounting Standard for Measurement of Inventories”, July 4, 2019ASBJ Statement No. 10, “Accounting Standard for Financial Instruments”, July 4, 2019ASBJ Guidance No. 31, “Implementation Guidance on Accounting Standard for Fair Value Measurement”, July 4, 2019ASBJ Guidance No. 19, “Implementation Guidance on Disclosures about Fair Value of Financial Instruments”, March 31, 2020

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Data
Notes to Consolidated Financial Statements(1) Summary	In order to improve the comparability with the international accounting standards, “Accounting Standard for Fair Value Measurement”
and “Implementation Guidance on Accounting Standard for Fair Value Measurement” were developed and guidance on fair value
measurement was established. The accounting standard and the implementation guidance apply to the fair value of the following items:

4(Changes due to the adoption of “Accounting Standard for Disclosure of Accounting Estimates”)
The ASBJ Statement No. 31, “Accounting Standard for Disclosure of Accounting Estimates”, March 31, 2020 has been applied to theconsolidated financial statements from the end of the year ended December 31, 2021, and the note on significant accounting estimates has
been provided in the consolidated financial statements.

• Financial instruments under “Accounting Standard for Financial Instruments”• Inventories held for trading purposes under “Accounting Standard for Measurement of Inventories”
	In addition, “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” was revised and established theprinciples regarding disclosures such as a breakdown of the fair value of financial instruments by level of the fair value hierarchy.
(2) Scheduled application date
The Group plans to apply the relevant accounting standards from the beginning of the year ending December 31, 2022.

Changes in Presentation

However, in this note, information on the year ended December 31, 2020, has not been provided in accordance with the transitional
treatment provided for in the provisions to paragraph 11 of this accounting standard.

5

Business Combination
The information is omitted as it is immaterial.

(3) Impact of applying relevant accounting standards
	The effects on the consolidated financial statements of applying the Accounting Standard for Fair Value Measurement are underevaluation.

6

Cash and Cash Equivalents
Cash and cash equivalents as of December 31, 2021 and 2020, consisted of the following:(Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System)(Millions of yen)

ASBJ PITF No. 42, “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System”, August 12, 2021
Cash and deposits(1) Summary

Certificates of deposit due within three months

	In conjunction with the shift to the group tax sharing system, the accounting treatment and disclosure of the income taxes and local
income taxes and deferred tax accounting when applying the group tax sharing system were established.
(2) Scheduled application date
The Group plans to apply the ASBJ practical solution from the beginning of the year ending December 31, 2023.

Cash and cash equivalents

7

2020

¥ 67,528¥ 59,631

500

500¥ 68,028¥ 60,131

Notes Maturing at the Year-end
Notes with maturities at year-end were treated as having been settled on the maturity date, although the consolidated balance sheet datefell on a holiday of financial institutions. The amounts of notes matured at the year-end were as follows:(3) Impact of applying the ASBJ practical solution(Millions of yen)

The effects on the consolidated financial statements of applying the ASBJ practical solution are under evaluation.

3

2021

Notes receivable-tradeSignificant Accounting Estimates

Electronically recorded monetary claims-operating

2021

2020

¥ 207

¥ 437

533

500

Recoverability of deferred tax assets(1) Amounts recorded on the consolidated financial statements for the year ended December 31, 2021
(Millions of yen)

2021
Deferred tax assets

Inventories
Inventories as of December 31, 2021 and 2020, were composed of the following:(Millions of yen)

¥ 14,974
2021

2020

Merchandise¥ 30,656¥ 23,197

Because taxable profit was arising in a stable manner for the year ended December 31, 2021 and no significant changes were expected
to occur in the business environment in the near future or afterwards as of December 31, 2021, the Group estimates that the deferred
tax assets corresponding to deductible temporary differences for which scheduling is possible are recoverable. The Company and someof its domestic consolidated subsidiaries have adopted the consolidated taxation system. The Practical Solution on Tentative Treatment
of Tax Effect Accounting Under Consolidated Taxation System is applied.

Service parts

3,922

3,893

Work in process

145

103

The Group determines the estimates for future taxable profit and the circumstances of the business environment based on the
management’s best estimates and judgments and considers this to be appropriate. However, there is the possibility that theseassumptions may be affected by changes in future business plans and economic conditions, or by the amendment or promulgation ofrelated laws and regulations, and if a revision of these assumptions is required, that may affect recognized amounts in the consolidated
financial statements in the following year.

Note: For the software development contracts from which contract losses are expected, the inventory related to such contracts and relevant reserves for contract losses
do not offset each other and have been recorded in gross amounts in current assets and current liabilities, respectively.

(2) Information of significant accounting estimate relating to identified items

79

8Canon Marketing Japan Inc. I Integrated Report 2021

Supplies

511

631

Total

¥ 35,236¥ 27,826

Canon Marketing Japan Inc. I Integrated Report 2021

80

Data
Notes to Consolidated Financial Statements

Available-for-sale securities whose fair value is not readily determinable as of December 31, 2021 and 2020 were as follows:

Write-downs of inventories for the years ended December 31, 2021 and 2020, net of the amount of the reversal, were included in thefollowing account:(Millions of yen)

(Millions of yen)

Cost of sales

2021

2020

¥ 1,198

¥ 964

2021

2020

¥ 668

¥ 1,380

Available-for-sale:
Unlisted equity securities
Investments in investment partnerships

Accrued loss on contracts included in cost of sales was as follows:

Total

998

864

¥ 1,666¥ 2,245(Millions of yen)

Cost of sales

2021

2020

¥ 308

¥8

The proceeds, realized gains and realized losses of the available-for-sale securities which were sold during the years ended December 31,
2021 and 2020, were as follows:(Millions of yen)

9

2021

Investments in Securities

Proceeds
Equity securities(Millions of yen)

2021

2020

¥ 15,687¥ 9,057

Unlisted equity securities

668

1,380

Investments in investment partnerships

998

864

¥ 17,353¥ 11,302

Total

Realized losses

2020
Proceeds

Realized gains

¥ 249

¥ 228

Realized losses

Available-for-sale:

Investments in securities as of December 31, 2021 and 2020, consisted of the following:

Marketable equity securities

Realized gains¥ 1,553¥ 1,255—¥0

Others

—

—

—

93

49

—

Total

¥ 1,553¥ 1,255

—

¥ 343

¥ 278

¥0

Impairment loss of ¥ nil and ¥0 million (rounded) was recorded on listed equity securities for the years ended December 31, 2021 and 2020,
respectively.
Impairment loss of ¥18 million and ¥316 million was recorded on unlisted equity securities in the years ended December 31, 2021 and 2020,
respectively.

Investments in securities as of December 31, 2021 and 2020, were classified and included in the following accounts:(Millions of yen)

2021

2020

10

Asset Retirement Obligations
The Group recognizes restoration obligations under real estate rental agreements of buildings and other real estates as asset retirement
obligations.

Securities classified as:
Available-for-sale:
Investments in securities
Total¥ 17,353¥ 11,302¥ 17,353¥ 11,302

Instead of recognizing liabilities, the Group reasonably estimates the uncollectible amount of lease deposits related to the real estate rental
agreements, and accounts for the portion of such estimated amount attributable to the current year as an expense.
The outstanding balances of lease deposits considered uncollectible as of December 31, 2021 and 2020, were ¥3,507 million and ¥3,194
million, respectively.

The carrying amounts and aggregate fair values of marketable equity securities as of December 31, 2021 and 2020, were as follows:
Consolidated Detailed Schedule of Asset Retirement Obligations(Millions of yen)Pursuant to the provision of Article 92-2 of the Regulations on Consolidated Financial Statements, the information of consolidated detailed
schedule of asset retirement obligations is omitted, because the amounts of asset retirement obligations at the beginning and the end of
the year ended December 31, 2021 were not more than 1% of the total of liabilities and equity at the beginning and the end of the year ended
December 31, 2021.

2021
Cost

Unrealized gains

Unrealized losses

Fair value¥ 4,358¥ 11,531¥ (202)¥ 15,687¥ 4,358¥ 11,531¥ (202)¥ 15,687

Securities classified as:
Available-for-sale:
Equity securities
Total

11

Investment Property
The information is omitted as it is immaterial.

(Millions of yen)

2020
Cost

Unrealized gains

Unrealized losses

Fair value

Securities classified as:
Available-for-sale:
Equity securities
Total

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Canon Marketing Japan Inc. I Integrated Report 2021

¥ 2,992¥ 6,162¥ (97)¥ 9,057¥ 2,992¥ 6,162¥ (97)¥ 9,057

Canon Marketing Japan Inc. I Integrated Report 2021

82

Data
Notes to Consolidated Financial Statements

12(2) Reconciliation of plan assets at beginning and end of year, excluding the simplified method in (3)Short-term Borrowings, Lease Obligations, and Deposits(Millions of yen)

Short-term borrowings, Lease obligations, and deposits included in Other long-term liabilities for the year ended December 31, 2021, wereas follows:
Category

Balance at
beginning of year

Balance at endof yearAverageinterest rate

—

—

—

—

52

—

—

(Millions of yen)

Short-term borrowings

54¥

Current portion of lease obligations(Millions of yen)¥

Payment due(%)

Long-term borrowings, excluding current portion

—

—

—

—

Lease obligations, excluding current portion

74

81

—

2023 - 2026

2,967

2,596

0.00%

—

¥ 3,095¥ 2,729——

Guarantee deposits received
Total¥ 166,497¥ 166,870

4,155

4,126

Actuarial (gains) losses

4,443

1,197

Contributions from the employer

2,990

2,927

Benefit paid

(7,586)(7,087)—(1,536)¥ 170,500¥ 166,497

Plan assets at end of year

(3) Reconciliation of retirement benefit obligations at beginning and end of year for which the simplified method was applied(Millions of yen)

Notes: 1. “Average interest rate” represents weighted-average interest rate with respect to the ending balance of borrowings, etc.
 he average interest rate on lease obligations is not provided because the amount of lease obligations stated in the consolidated balance sheets is the amount
2. T
before deducting interest equivalents included in the total lease payments.
3. The repayment schedule of lease obligations, excluding current portion, for five years after the consolidated balance sheet date is as follows:(Millions of yen)

1 year to 2 years
Lease obligations

13

2 years to 3 years

¥ 37

¥ 22

3 years to 4 years

4 years to 5 years

¥ 14

2020

Expected return on plan assets

Plan assets at beginning of year

Decrease resulting from exclusion of subsidiaries in consolidation

Other interest-bearing liabilities

2021

¥5

2021

2020

¥ 844

¥ 780

Net periodic benefit costs

98

115

Benefit paid

(23)

(8)

Contributions to plans

(45)

(42)

Decrease resulting from exclusion of subsidiaries in consolidation

(131)

—

¥ 742

¥ 844

Accrued pension and severance costs at beginning of year

Accrued pension and severance costs at end of year

Corporate Bonds(4)	Reconciliation of retirement benefit obligations and plan assets at year-end and accrued and prepaid pension and severance costs inconsolidated balance sheets

Not applicable(Millions of yen)

14

Employees’ Retirement and Severance Benefits
1. Overview of retirement benefit plans adopted
The Company has a defined contribution pension plan, a pension plan with a market-based variable accumulation rate - quasi-cash balanceplan, and a lump-sum severance payment plan -, and some of its consolidated subsidiaries have defined benefit corporate pension plans,
and lump-sum severance payment plans.

2021

2020

Funded retirement benefit obligations¥ 190,934¥ 193,609

Plan assets(170,872)(166,852)

20,062

26,756

20,42920,711

Net liabilities and assets in consolidated balance sheets¥ 40,492¥ 47,468

Accrued pension and severance costs¥ 40,913¥ 47,883

Prepaid pension and severance costs

(421)

(415)

¥ 40,492¥ 47,468

Unfunded retirement benefit obligations

2. Defined benefit plans(1) Reconciliation of retirement benefit obligations at beginning and end of year, excluding the simplified method in (3)(Millions of yen)

2021

2020

¥ 213,121¥ 219,653

Service costs

5,820

6,142

Interest costs

1,095

940

Retirement benefit obligations at beginning of year

(860)

(3,546)(8,925)(8,163)

Decrease resulting from exclusion of subsidiaries in consolidation—(1,904)

Other

—

(0)

¥ 210,250¥ 213,121

Actuarial (gains) losses
Benefit paid

Retirement benefit obligations at end of year

83

Canon Marketing Japan Inc. I Integrated Report 2021

Net liabilities and assets in consolidated balance sheets
Note: Plans for which the simplified method was applied were included.

Canon Marketing Japan Inc. I Integrated Report 2021

84

Data
Notes to Consolidated Financial Statements

3. Defined contribution plan(5) Retirement benefit costs

The required contributions of the Company and consolidated subsidiaries to defined contribution plans, including employees’ pension fundplan in the multiemployer plan which is accounted for in the same manner as the defined contribution plan, totaled ¥1,922 million and¥1,949 million for the years ended December 31, 2021 and 2020, respectively.

(Millions of yen)

2021

2020

Service costs¥ 5,820¥ 6,142Interest costs

1,095

940

Expected return on plan assets(4,155)(4,126)

Amortization of actuarial (gains) losses

1,249

3,281

Amortization of prior service costs

(301)

(293)

98

115

¥ 3,806¥ 6,060

Net periodic benefit costs using the simplified method
Retirement benefit costs of defined benefit plans

15

The Company provides the following guarantee obligations.
(Millions of yen)

Guarantees for employees’ housing loans

Note: In addition to the above retirement benefit costs, the Group recorded ¥441 million for extra retirement payments for the year ended December 31, 2020.

(6) Defined retirement benefit plans before income tax effect adjustment

16

Changes in unrecognized prior service costs and unrecognized actuarial gains and losses for the years ended December 31, 2021 and2020, were as follows:(Millions of yen)2021
Unrecognizedprior service
costs
At beginning of year

¥ (1,508)¥ 3,319

Total¥ 1,810

Unrecognizedprior service
costs

Unrecognizedactuarial gains
and losses¥ (1,802)¥ 11,234

Total¥ 9,431301(6,553)(6,251)

293(7,915)(7,621)¥ (1,207)¥ (3,234)¥ (4,441)¥ (1,508)¥ 3,319¥ 1,810

Net change
At end of year

Unrecognizedactuarial gains
and losses

2020

Contingent Liabilities (Guarantee Obligations)

2021

2020

¥4

¥5

Shareholders’ Equity
The Companies Act of Japan went into effect on May 1, 2006, replacing the Commercial Code. It is applicable to events or transactions ofcompanies in Japan occurring on or after May 1, 2006, and for the years ending on or after May 1, 2006.
The Companies Act stipulates that the amounts actually paid in or provided in consideration for newly issued stock shall be recorded ascommon stock. However, it also allows 50% or less of such amounts to be recorded as additional paid-in capital.
Under the Companies Act, a company that meets certain criteria can establish its Articles of Incorporation so that dividends can be paid
to its existing shareholders by resolution of the Board of Directors, without requiring the approval of a resolution at a General Meeting of
Shareholders. The Company has met said criteria and amended its Articles of Incorporation at the annual General Meeting of Shareholders
for the year ended December 31, 2006. The Companies Act provides that an amount equal to 10% of the amount to be disbursed as
distributions of capital surplus other than the capital reserve and retained earnings other than the legal reserve be transferred to thecapital reserve and the legal reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the common
stock account. However, such appropriation cannot be made if the aggregate amount of the legal reserve exceeds 25% of common stock (i.e.,
the aggregate amount of the Company’s legal reserve has already reached 25% of its common stock).

(7) Plan assets(i) Main components of plan assets		

Ratios for main components of plan assets were as follows:
2021

2020

Bonds

22%

22%

Stocks4

3

Pooled funds

52

52Life insurance company general accounts

16

17

Other

6

6

100%

100%

Total

Note: The composition of pooled funds was 44% in bonds and 56% in stocks as of December 31, 2021, and 47% in bonds and 53% in stocks as of December 31, 2020.

(ii) Methodology for setting long-term expected rates of return		The long-term expected rate of return on plan assets is determined by considering current and projected plan asset allocations andcurrent and anticipated long-term rates of return from diverse plan assets.
(8) Actuarial assumptions
The principal actuarial assumptions for the years ended December 31, 2021 and 2020, were as follows:2020

0.24 - 0.60%

0.24 - 0.59%

Long-term expected rates of return on plan assets

2.0 - 2.5%

2.0 - 2.5%

Estimated rates of salary increases

1.9 - 2.6%

1.9 - 2.6%

Discount rates

85

2021

Canon Marketing Japan Inc. I Integrated Report 2021

Canon Marketing Japan Inc. I Integrated Report 2021

86

Data
Notes to Consolidated Financial Statements

17

18

Common Stock and Dividends
1. The following table shows the movement of number of common stock for the years ended December 31, 2021 and 2020.
(Thousands of shares)

As of January
1, 2020

Increase orpurchase

Decrease orsale

As of December
31, 2020

Increase orpurchase

Decrease orsale

As of December
31, 2021

Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in astatutory income tax rate of approximately 31% for the years ended December 31, 2021 and 2020.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at
December 31, 2021 and 2020, are as follows:(Millions of yen)

Issued stock
Common stock

151,079—

20,000—131,079—

131,0792020¥ 12,731¥ 14,882

DEFERRED TAX ASSETS:

Treasury stock
Common stock

2021

21,413

1

20,002

1

1,412

9

1,404

Accrued pension and severance costs

1,399

1,953

Accrued business tax and business office tax

765

711

Excess depreciation of long-lived assets

758

839

Recording of estimated future variable consideration

732

726

Asset retirement obligations

691

607

Excess amortization of software

687

676

Accrued bonuses

Notes: 1. The decrease of issued stock of 20,000 thousand shares for the year ended December 31, 2020, was due to the cancellation of treasury stock.
 he increase of treasury stock of 1 thousand shares and 1 thousand shares for the years ended December 31, 2021 and 2020, respectively, was due to the
2. Tpurchase of fractional stock.
3. T he decrease of treasury stock of 20,002 thousand shares for the year ended December 31, 2020, was due to the cancellation of treasury stock, the disposal of
performance-linked stock incentives, and the sale of fractional stock.
4. The decrease of treasury stock of 9 thousand shares for the year ended December 31, 2021, was due to the disposal of performance-linked stock incentives.

2. Matters regarding dividends

Loss on impairment of investments in securities

568

565

The Company distributes a semiannual interim dividend by resolution of the Board of Directors and annual dividend by resolution of theGeneral Meeting of Shareholders.

Loss on disposal and devaluation of inventories

506

431

Semiannual interim dividends is paid to the common shareholders of the Company as of semiannual period-end and annual dividend is paid
to the common shareholders of the Company as of year-end.

Allowance for long-term continuous service rewards

279

295

Loss on valuation of golf club membership

97

102

Accrued product warranties

90

140

Tax loss carryforwards (Note)

57

91

Lump-sum depreciable assets

53

68

Resolution date, total dividends, and dividend per share for the years ended December 31, 2021 and 2020, were as follows:
2021
Resolution date

Total dividends

Annual dividend

March 26, 2021

¥ 5,186

Interim dividend

July 27, 2021

¥ 3,890(Millions of yen)

Dividend per share

2020
Dividend per share

Resolution date

Total dividends¥ 40

March 26, 2020

¥ 3,889

¥ 30

¥ 30

July 27, 2020

¥ 2,593

¥ 20

(yen)

(Millions of yen)

(yen)

31

32

Other

1,254

1,214

Gross deferred tax assets

20,70523,339

(802)

(855)

¥ 19,903¥ 22,483¥ 3,526¥ 1,888

1,279

1,279

Loss on impairment of long-lived assets

Less: valuation allowance
Annual dividend of ¥5,835 million (¥45 dividend per share) was resolved by the General Meeting of Shareholders held on March 29, 2022.

Total deferred tax assets

Total dividend per share was ¥75 and ¥60 for the years ended December 31, 2021 and 2020, respectively.
DEFERRED TAX LIABILITIES:
Unrealized gain (loss) on available-for-sale securities
Deferred capital gain
Other
Total deferred tax liabilities
Net deferred tax assets

122

96

¥ 4,928¥ 3,264¥ 14,974¥ 19,218

Note: Information regarding the amounts of tax loss carryforwards and related deferred tax assets by expiration of carryforwards is omitted as the tax loss carryforwards
are immaterial.

Net deferred tax assets as of December 31, 2021 and 2020, are reflected in the following accounts in the consolidated balance sheet:(Millions of yen)

Investments and other assets—deferred tax assets
Long-term liabilities—deferred tax liabilities
Net deferred tax assets

87

Canon Marketing Japan Inc. I Integrated Report 2021

2021

2020

¥ 14,974¥ 19,219—(1)¥ 14,974¥ 19,218

Canon Marketing Japan Inc. I Integrated Report 2021

88

Data
Notes to Consolidated Financial Statements

A reconciliation between the statutory income tax rate and the effective income tax rate as of December 31, 2021 and 2020, was as follows:

The components of “Loss on sales and disposal of long-lived assets” for the years ended December 31, 2021 and 2020, were as follows:
The components of “Loss on sales of long-lived assets”

2021

2020

—

31.0%
2021

2020

Entertainment and other expenses permanently not deductible for tax purposes—

0.3

Buildings and structures—¥0

Per-capita levy of inhabitants’ taxes—

0.9

Furniture and fixtures¥1

1

Dividend income not taxable

—

(0.1)

¥1

¥1

Adjustment of book value of stocks of subsidiary for consolidated tax payment system

—

2.4

Other

—

(0.5)

Effective income tax rate

—

34.0%

Statutory income tax rate

(Millions of yen)

(Reconciliation)

Total

The components of “Loss on disposal of long-lived assets”(Millions of yen)

Note: The reconciliation as of December 31, 2021 was omitted because the difference between the statutory income tax rate and the effective income tax rate was 5% orless of the statutory income tax rate.

2021
Buildings and structures

19

Research and Development Costs
Total research and development costs included in selling, general and administrative expenses and cost of sales for the years ended
December 31, 2021 and 2020, were as follows:

Research and development costs

20

2021

2020

¥ 402

¥ 426

Rental assets

57

62

Software

6

888

0

8

¥ 122

¥ 1,020

For the year ended December 31, 2021, loss on disaster of ¥168 million was recorded as cost of restoration of assets associated withdamage from typhoons, etc. In addition, insurance claim income received from the associated insurance claim of ¥202 million wasrecorded as insurance income due to disaster.
The details of “Loss on COVID-19” were as follows:
For the year ended December 31, 2020, loss on COVID-19 mainly related to event cancellation fees, resulted from the government’s
restrictions on events and outdoor gatherings in response to the outbreak of COVID-19.

(Millions of yen)

2021

2020

¥ 71,461¥ 69,827

3,536

4,988

22

Lease Transactions

Accrued directors’ bonuses

97

74

Operating lease transactions

Provision of allowance for long-term continuous service rewards

356

368

1. Lessees’ accounting

5,052

7,118

The following table shows future minimum lease payments subsequent to December 31, 2021 and 2020, for noncancelable operating leases:

Accrued product warranties

288

446

(Millions of yen)

Provision of allowance for doubtful receivables

(48)

3

Net periodic retirement benefit costs

Due within one year

21

34

The details of “Insurance income due to disaster” and “Loss on disaster” were as follows:

The primary components of “Selling, general and administrative expenses” for the years ended December 31, 2021 and 2020, were as
follows:

Accrued bonuses

23

Total

Selling, General and Administrative Expenses

Salaries and allowances

26¥

Furniture and fixtures

Other(Millions of yen)

¥ 34

2020

Due after one year

Other Income (Expenses)

Total

2021

2020

¥ 2,223¥ 2,611

6,255

8,478

¥ 8,478¥ 11,089

The components of “Gain on sales of long-lived assets” for the years ended December 31, 2021 and 2020, were as follows:(Millions of yen)89

2. Lessors’ accounting

2021

2020

Buildings and structures

—

¥ 103

Machinery and vehicles¥4

1

Furniture and fixtures

1

1

Due within one year

Rental assets—

1

Due after one year

Land

—

175

Software

0

0

Total

¥6

¥ 283

Canon Marketing Japan Inc. I Integrated Report 2021

The following table shows future minimum lease income subsequent to December 31, 2021 and 2020, for noncancelable operating leases:(Millions of yen)

Total

2021

2020

¥ 1,891¥ 1,819

8,998

2,997

¥ 10,890¥ 4,816

Canon Marketing Japan Inc. I Integrated Report 2021

90

Data
Notes to Consolidated Financial Statements

23

As of December 31, 2020

Financial Instruments(Millions of yen)

1. Information on financial instruments

Book value(1) Policies for financial instruments¥ 60,131(1) Cash and cash equivalents

The Group limits its asset management to financial instruments characterized as low default risk and believes that financing should
mainly be conducted through the use of Group finances whenever necessary. The Company enters into derivative transactions to hedge
against foreign exchange fluctuation risks and not for speculative purposes.

(2) Notes and accounts receivable-trade

Operating receivables, consisting of notes and accounts receivable-trade, are exposed to credit risks of customers. The Group strives
to mitigate these risks by strict credit control utilizing credit information provided by external credit agencies, as well as by credit
insurance and other risk-hedging means.
Short-term loans receivable are mainly the loans to the parent company by the Company, rendered in compliance with the internal
regulations for investment and management of funds.

Allowance for doubtful receivables (*1)

Trade payables, consisting of notes and accounts payable-trade, are mainly those due within six months.
Derivative transactions consist of forward exchange contracts to hedge against the risks of fluctuations in foreign currency-denominatedtrade payables. Hedge accounting methods are described in “(v) Key Hedge Accounting Methods” of “2 Summary of Significant
Accounting Policies.”¥ 60,131—

105,261—(66)
105,261(3) Investments in securities

9,057

9,057

—

(4) Short-term loans receivable

180,006

180,006—¥ 354,457¥ 354,457—¥ 44,107¥ 44,107—¥ 44,107¥ 44,107—

Total assets(5) Notes and accounts payable-trade
Total liabilities

Investments in securities consist primarily of held-to-maturity debt securities and equity securities issued by business counterpartiesof the Group, and are exposed to market price fluctuation risk. Regarding this risk, the Group periodically monitors the fair values of the
securities and the financial condition of their issuers, i.e., business counterparties. In addition, for securities other than held-to-maturity
debt securities, the Group continuously reviews the status of security holdings, taking market conditions and relationships with businesscounterparties into consideration.

Difference

105,328

Notes and accounts receivable-trade, net(2) Types and risks of financial instruments and systems to control those risks

Fair value(*1) Allowance for doubtful receivables corresponding to notes and accounts receivable-trade are deducted from the values.
Notes: 1. Calculation methods of fair values of financial instruments and other matters related to securities and derivatives are as below:
Assets(1) Cash and cash equivalents, (2) Notes and accounts receivable-trade, and (4) Short-term loans receivable
The book values of these assets are used as their fair values, since they are to be settled in the short term and, accordingly, their book values approximate theirfair values.
(3) Investments in securities
The fair values of equity securities are based on the prices at the security exchanges, and those of debt securities are based on the prices at the security
exchanges or quotations obtained from counterparty financial institutions. Details of securities by holding objectives are described in the notes on “Investments
in Securities.”
Liabilities(3) Supplementary explanation on fair values of financial instruments(5) Notes and accounts payable-trade

The fair values of financial instruments include not only values based on market quotations, but also values calculated based onassumptions that management believes reasonable in cases where market quotations are not available. Such values may varydepending on different assumptions, as variables are factored into the calculation of such values.

The book values of these liabilities are used as their fair values, since they are to be settled in the short term and, accordingly, their book values approximate
their fair values.
2. The book values of financial instruments whose fair values are not readily determinable as of December 31, 2021 and 2020, were as follows:

2. Fair values of financial instruments(Millions of yen)

The book values of financial instruments in the consolidated balance sheets as of December 31, 2021 and 2020, their fair values, and thedifferences between the two are as follows. The table below, however, excludes the financial instruments whose fair values are not readily
determinable (see Note 2. below).

(Millions of yen)Book value(2) Notes and accounts receivable-trade
Allowance for doubtful receivables (*1)
Notes and accounts receivable-trade, net(3) Investments in securities(4) Short-term loans receivable
Total assets(5) Notes and accounts payable-trade
Total liabilities

Unlisted equity securities
Investments in investment partnerships

Fair value¥ 1,380998

864¥ 68,028¥ 68,028

Impairment loss of ¥316 million was recorded for unlisted equity securities in the year ended December 31, 2020.

Difference—

107,367

3. The redemption schedule of monetary claims and securities with maturities as of December 31, 2021 and 2020, were summarized as follows:(Millions of yen)

(24)

2021

107,343

107,343—

15,687

15,687—

180,004

180,004—¥ 371,063¥ 371,063—¥ 46,323¥ 46,323—¥ 46,323¥ 46,323—

2020

Due within 1 year

1 year to 5 years

Due within 1 year

1 year to 5 years

Cash and cash equivalents¥ 68,028—¥ 60,131—

Notes and accounts receivable-trade107,367—

105,328—

Short-term loans receivable

180,004—

180,006—¥ 355,400—¥ 345,466

—

Total

4. The repayment schedule of lease obligations as of December 31, 2021 and 2020, was as follows:(Millions of yen)

2021

Lease obligations

Canon Marketing Japan Inc. I Integrated Report 2021

2020

¥ 668

Impairment loss of ¥18 million was recorded for unlisted equity securities in the year ended December 31, 2021.

(*1) Allowance for doubtful receivables corresponding to notes and accounts receivable-trade are deducted from the values.

91

2021

	These financial instruments are not included in (3) Investments in securities in the preceding table of fair values, since they do not have market prices and,
therefore, their fair values are not readily determinable.

As of December 31, 2021

(1) Cash and cash equivalents

Category

2020

Due within
1 year

1 year to
2 years

2 years to
3 years

3 years to
4 years

4 years to
5 years

Due within
1 year

1 year to
2 years

2 years to
3 years

¥ 52

¥ 37

¥ 22

¥ 14

¥5

¥ 54

¥ 38

¥ 23

3 years to
4 years¥9

4 years to
5 years¥1

Canon Marketing Japan Inc. I Integrated Report 2021

92

Data
Notes to Consolidated Financial Statements

24(2) Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties

Derivatives

The information is omitted as it is immaterial.

The information is omitted as it is immaterial.
2. Notes on the parent company and significant associates

25

Parent company information

Related Party Information

Canon Inc. listed on the Tokyo, Nagoya, Fukuoka, Sapporo and New York stock exchanges

1. Related party transactions(1) Transaction conditions and policies for deciding transaction conditions with related party

26(a) Purchases of products are decided based on price negotiations each year, after considering market prices and the Company’s
proposals regarding desired prices.

Other Comprehensive Income (Loss)
The following table shows amounts arising during the year, reclassification adjustments, pre-tax amount, tax effect, and net-of-tax amountfor each component of other comprehensive income (loss) for the years ended December 31, 2021 and 2020: ales of office equipment, consumables, and other inventories are subject to similar conditions as general transactions.
(b) S
(c) W
 ith regard to loans of capital, interest rates on loans are decided rationally after considering market interest rates. Furthermore,collateral is not accepted.
Transaction with major corporate stockholders for the year ended December 31, 2021, and related balance as of December 31, 2021, wereas follows:

Category

Name ofcompany

Address

Capital orinvestment
capital(Millions of yen)

Business
contents or
occupation

Percentage
possession of
voting rights(Ownership)

Relatedcontents

Contents of transactions

Transaction
amountAccounts¥ 148,759

Accounts
payabletrade(Millions of yen)

Canon
Inc.

Ohta-ku,Tokyo¥ 174,761(Millions of yen)(%)

Purchasesof products

Parentcompany

Balance at
end of year

Development
andmanufacturing(Ownership)in the office,Direct 58.5%
imaging system,
Indirect 0.0%
and industrial
equipment
areas

Manufactureof products
sold by
Canon MJ

Operatingtransactions

Nonoperatingtransactions

Sales ofofficeequipment
and consumables,
and otherinventories¥ 4,073

Accounts
receivabletrade andothers¥ 16,154¥ 1,203

Loans ofcapital—¥ 180,000

Transaction with major corporate stockholders for the year ended December 31, 2020, and related balance as of December 31, 2020, wereas follows:

Category

Name ofcompany

Address(Millions of yen)

Parentcompany

Canon
Inc.

Ohta-ku,Tokyo¥ 174,761

Business
contents or
occupation

Percentage
possession of
voting rights(Ownership)

Relatedcontents

Contents of transactions

Transaction
amountAccounts(Millions of yen)

Balance at
end of year

(Millions of yen)(%)

Development
andmanufacturing(Ownership)in the office,Direct 58.5%
imaging system,
Indirect 0.0%
and industrial
equipment
areas

Manufactureof products
sold by
Canon MJ

Operatingtransactions

Nonoperatingtransactions

Unrealized gain (loss) on available-for-sale securities:
Amount arising during the year

¥ 6,537

Reclassification adjustments(1,255)

¥

667
(220)

Pre-tax amount

5,281

446

Tax effect(1,637)(143)

Net-of-tax amount

3,643

302

Deferred gain (loss) on derivatives under hedge accounting:
75

(58)

Pre-tax amount

75

(58)

Tax effect

(23)

18

Net-of-tax amount

51

(40)

129

(56)

Amount arising during the year

Amount arising during the year
Shortterm loans
receivable

2020

Foreign currency-translation adjustments:

Note: Transaction amounts do not include consumption tax or other taxes, however, the account balances include consumption tax.

Capital orinvestment
capital(Millions of yen)

2021

7

—

Pre-tax amount

137

(56)

Tax effect——Net-of-tax amount

137

(56)

Amount arising during the year

5,304

4,744

Reclassification adjustments

947

2,877

Reclassification adjustments

Defined retirement benefit plans:

Pre-tax amount

6,251

7,621

Tax effect(1,940)(2,367)Net-of-tax amount

Purchases of
products¥ 144,942

Accounts
payabletrade¥ 17,301

Salesof officeequipment
and consumables,
and otherinventories¥ 3,479

Accounts
receivabletrade andothers¥ 1,848

Loans ofcapital¥ 10,000

Shortterm loans
receivable¥ 180,000

Total other comprehensive income (loss)

4,311

5,253

¥ 8,144¥ 5,459

Note: Transaction amounts do not include consumption tax or other taxes, however, the account balances include consumption tax.

93

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94

Data
Notes to Consolidated Financial Statements

27

28

Per Share Data
(Yen)

Item

2021

2020

¥ 2,883.74¥ 2,664.20

Basic earnings per share

226.88169.65

Diluted earnings per share

226.83169.62

Shareholders’ equity per share

Segment Information
Segment information
1. Description of reportable segments
Reportable segments are constituent units of the Group for which separate financial information is available and they are subject to periodic
reviews by the Board of Directors to determine the allocation of management resources and assess their respective operating results.
In addition, starting from the current year, part of the organization conducting direct sales to upper medium-sized and quasi-major
customers in the Area segment was transferred to the Enterprise segment.
Segment information presented for the previous year has been prepared according to the classification method after the changes.

Notes: 1. The bases for calculating shareholders’ equity per share are as follows:(Millions of yen)

Total equity at end of year
Amount deducted from total equity at end of year
Non-controlling interests
Total equity pertaining to common stock at end of year
No. of shares at the end of the year (Thousands of shares)

2021

2020

¥ 374,676¥ 346,114

727

655

¥ 373,949¥ 345,458

129,675

129,667(Major business areas and main Group companies in each reportable segment)
Reportable segment
Consumers

Enterprise

2. The bases for calculating basic and diluted earnings per share are as follows:(Millions of yen)

2021

2020

¥ 29,420¥ 21,997

Basic earnings per share
Net income attributable to owners of the parent
Net income (loss) not attributable to common shareholders
Net income attributable to owners of the parent pertaining to common stock
Weighted-average number of shares of common stock outstanding during the period(Thousands of shares)——¥ 29,420¥ 21,997

129,673

129,667

Area

Sells Canon input and output devices and provides solutions that contribute to solving business problems in eachindustry primarily for large corporations, quasi-major and upper medium-sized enterprises.
[Major Group company]
Canon IT Solutions Inc.
Sells Canon input and output devices and provides solutions that help customers solve business problems
primarily for small and medium-sized enterprises in Japan.
[Major Group company]
Canon System & Support Inc.
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.
[Major Group company]
Canon Production Printing Systems Inc.

Diluted earnings per share
Adjustment to net income attributable to owners of the parent——

Increase in number of shares of common stock(Thousands of shares)

28

22

—

—

Overview of potential shares that were not included in calculating diluted earnings per sharebecause they have no dilutive effects

Major business areas and Group companies
Sells products such as digital cameras and inkjet printers primarily to individual customers.

 he increase of common stock of 28 thousand shares and 22 thousand shares for the years ended December 31, 2021 and 2020, respectively, were due to theNote: T
grants of performance-linked stock incentives.

Professional• Industrial Equipment
Provides products such as semiconductor manufacturing systems and inspection and measurement devices
mainly to semiconductor manufacturers and other electronics device manufacturers.
• Healthcare
Provides IT solutions, system development, network construction, and hardware mainly for the medical andhealthcare field.
[Major Group company]
Canon ITS Medical Inc.

2. Methods of measurement for sales, segment income (loss), assets, and other items for reportable segments
Accounting methods for reportable segments are the same as the accounting methods described in the notes on “Summary of Significant
Accounting Policies.” Segment income (loss) is measured based on the amount of operating income. Intersegment sales and transfers are
based on market prices.

95

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Data
Notes to Consolidated Financial Statements

3. Information by reportable segment for the years ended December 31, 2021 and 2020, was as follows:

Related information

Year ended December 31, 2021

Years ended December 31, 2021 and 2020
(Millions of yen)

Reportable segment
Consumers

Enterprise

Area

Professional

Other(Note 1)

¥ 129,432¥ 180,042¥ 209,198¥ 30,059¥ 3,351¥ 552,085—¥ 552,085

38

10,552

11,627

1,476

7,886

31,581¥ (31,581)—¥ 129,471¥ 190,594¥ 220,826¥ 31,536¥ 11,238¥ 583,667¥ (31,581)¥ 552,085¥ 13,572¥ 13,856¥ 12,045¥

2,488¥ (2,266)¥ 39,696¥3¥ 39,699

45,913

110,21467,621

20,1572,220

246,128

280,289

526,418

Depreciation and amortization

468

7,176

1,923

296

27

9,892

354

10,246

Changes in the amount ofproperty, plant and equipment
and intangible assets

858

9,493

2,023

135

55

12,56668

12,634

Total

Adjustments(Note 2)

Consolidated(Note 3)

1. Information by product and service
Disclosure of information by product and service is omitted since the segment information contains the same information.

Net sales:
External customers
Intersegment
Total
Segment income (loss)
Segment assets
Other items:

2. Information by geographical area
(1) Sales
Disclosure of information on sales by geographical area is omitted since sales to domestic external customers account for more than
90% of consolidated net sales.
(2) Property, plant and equipment
Disclosure of information on property, plant and equipment by geographical area is omitted since the amount of domestic property,
plant and equipment accounts for more than 90% of total property, plant and equipment recorded in the consolidated balance sheets.
3. Information by major customers
Disclosure of information by major customers is omitted since no customer accounts for 10% or more of consolidated net sales.

Notes: 1. “Other” includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustments are as follows:		 (1) Adjustment of segment income (loss) eliminates intersegment transactions.
 djustment of segment assets is for corporate assets that do not belong to reportable segments. The corporate assets are comprised of surplus funds, such		 (2) A
as cash and investment in securities, assets related to head office land, buildings, and head office administrative units.
		 (3) Adjustment of depreciation and amortization is for head office building expenses that do not belong to reportable segments.
 djustment of increase of property, plant and equipment and intangible assets consists of capital investments in head office buildings that do not belong to		 (4) A
reportable segments.
3. Total segment income (loss) after adjustments for reportable and other business segments equals operating income in the consolidated statement of income.

Year ended December 31, 2020
(Millions of yen)

Reportable segment
Consumers

Enterprise

Area

Professional

Other(Note 1)

Total

Adjustments(Note 2)

Consolidated(Note 3)

¥ 124,695¥ 174,447¥ 213,830¥ 29,193¥ 2,893¥ 545,060—¥ 545,060

Net sales:
External customers
Intersegment
Total

44

10,136

9,831

1,515

6,297

27,824¥ (27,824)—¥ 124,739¥ 184,583¥ 223,662¥ 30,708¥ 9,191¥ 572,884¥ (27,824)¥ 545,060¥ 12,287¥

1,902¥ (1,252)¥ 31,350¥ (33)¥ 31,317

44,10098,152

68,943

14,9552,814

228,965

277,639

506,604

Depreciation and amortization

569

7,190

2,745

338

27

10,871

382

11,253

Changes in the amount ofproperty, plant and equipment
and intangible assets

1,355

11,746

2,839

338

39

16,31932

16,351

Segment income (loss)
Segment assets

9,429

¥

8,984

¥

Other items:

Notes: 1. “Other” includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustments are as follows:		 (1) Adjustment of segment income (loss) eliminates intersegment transactions.
 djustment of segment assets is for corporate assets that do not belong to reportable segments. The corporate assets are comprised of surplus funds, such		 (2) A
as cash and investment in securities, assets related to head office land, buildings, and head office administrative units.
		 (3) Adjustment of depreciation and amortization is for head office building expenses that do not belong to reportable segments.
 djustment of increase of property, plant and equipment and intangible assets consists of capital investments in head office buildings that do not belong to		 (4) A
reportable segments.
3. Total segment income (loss) after adjustments for reportable and other business segments equals operating income in the consolidated statement of income.

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Data

Independent Auditor’s Report

99

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100

Data
Independent Auditor’s Report

101

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102

Data

ESG Data
ENVIRONMENT

2017

2018

2019

2020

2021

GHG emissions at domestic business sites (Scope 1 and 2) (t-CO2) (Note 1)
Scope 1 (Note 2)
Scope 2

(Note 3)

Total

Category 2. Capital goods (Note 6)
Category 3. Fuel- and energy-related activities not included in Scope 1 or 2 (Note 7)
Category 4. Upstream transportation and distribution (Note 8)
Category 5. Waste generated in operations (Note 9)
Category 6. Business travel (Note 10)
Category 7. Employee commuting (Note 11)
Category 8. Upstream leased assets (Note 12)
Category 9. Downstream transportation and distribution (Note 13)
Category 10. Processing of sold products
Category 11. Use of sold products (Note 14)
Category 12. End-of-life treatment of sold products (Note 15)
Category 13. Downstream leased assets (Note 16)
Category 14. Franchises
Category 15. Investments
Total

8,339
33,53541,874

7,864
40,922
48,786

7,275
43,501
50,776

5,765
45,73351,4985,800
51,95257,752GroundwaterIndustrial water
Total

2018

2019

2020

2021

14,502
3,150
17,652

14,202
3,078
17,28013,8903,110
17,00013,385
3,159
16,54413,007
3,213
16,220

3,228
85
3,313
60.7

3,131
92
3,223
68.3

3,037
97
3,134
74.5

2,898
106
3,004
64.5

2,785
108
2,893
63.6

140
7

202(15)9(4)144(18)4(0)143(26)9(5)136(43)
3(3)

98.7
100.0

97.1(100.0)
87.5(100.0)

82.4(100.0)
75.0(-)

288
189
44.3
18.7

290
175
44.6
18.9

319
163
44.7
19.6

304
192
44.8
19.6

469
239
45.5
19.5

Percentage of employees (%)

150
2.1

150.5
2.15

149.5
2.19

142.0
2.15

147.5
2.32

GOVERNANCE

2017

2018

2019

2020

2021

8
0
8
2
0
2
10

5
0
5
2
0
2
7

4
0
4
2
0
2
6

4
0
4
2
0
2
6

4
0
4
2
0
2
6

2
0
2
3
0
3
5
63.9

2
0
2
3
0
3
5
62.6

2
0
2
3
0
3
5
63.4

2
0
2
3
0
3
5
62.3

2
0
2
3
0
3
5
62.6

17
18
23

15
18
23

16
20
23

18
17
23

16
17
26

Number of men
Number of women
Total
Group management

298,448
40,292
4,012
5,205
90
9,918
5,154
0
2,444
0
97,43633,509222
00496,730

236,406
27,726
4,601
4,039
137
9,048
5,401
0
1,122
0
88,59015,749219
0
0393,038

313,133
65,341
8,993
4,175
153
12,032
6,915
0
1,073
0
86,30915,118461
00513,703284,892
41,807
9,061
3,785
93
6,119
7,445
0
967
0
83,331
16,269518
00454,287

282,278
10,403
11,307
3,209
64
7,164
6,411
0
917
0
84,56013,951291
0
0420,555

148,857
19,9430
168,800

154,283
21,4380
175,721

161,912
21,8950
183,807

160,884
22,001
0
182,885

165,359
19,7500
185,10921,2440.034

18,6350.030

21,0980.034

15,6700.029

14,0750.025

13,777
13,77399.97

14,10914,10899.99

14,84014,83999.99

12,01512,01599.99

10,892
10,892
99.99

Water consumption by source of domestic business sites (m³) (Note 17)
Tap water

2017

Group employees

GHG emissions of domestic business sites (Scope 3) (t-CO2) (Note 4)
Category 1. Purchased goods and services (Note 5)

SOCIETY

Number of men
Number of women
Total
Percentage of Group employees taking paid leave (%)
Number of Group employees taking childcare and familycare leave (Note 22)Childcare leave
Family care leave
Percentage of Group employees returning to work after
taking childcare and family care leave (%) (Note 23)
Childcare leave
Family care leave

95.6(100.0) 95.8(100.0)
100.0(100.0) 100.0(100.0)

Number of Group retirees and reemployed workers
Number of retirees
Number of reemployed workers
Average age of Group employees
Average number of years of service of Group employees
Number of employees with disabilities (non-consolidated)
Number of employees

Waste emissions of domestic business sites (Note 18)
Total emissions (metric tons)
Sales units (metric tons per million yen) (Note 19)
Recycled amount of domestic business sites
Total volume of products recovered and processed from marketplace (metric tons)
Amounts recycled (metric tons) (Note 20)
Recycling rate (%) (Note 21)
ESG Data Notes
Note 1.	Scope of data aggregation covers ISO14001:2015 certified sites as of August 17, 2021.
Note 2. Scope 1: Direct emissions (town gas, LPG, diesel, kerosene, gasoline, etc.)
Note 3. Scope 2: Intermediate emissions (electricity, steam, etc.)
Note 4.	Scope of data aggregation for Category 1, 4, 9, 11, 12, and 13 covers purchased goods
from Canon Inc. and each company in the Canon Group, externally manufactured
products under contract by Canon MJ original planning, and products purchased fromother manufacturers. Scope of data aggregation for Category 2, 3, 5, 6, 7 and 8 covers
ISO14001:2015 certified sites as of August 17, 2021
Note 5.	For main Canon products, calculated by adding the direct emissions and intermediateemissions from manufacturing to the number obtained by multiplying weights of productinput raw materials by materials and process units, and externally purchased personal
computers, servers etc. are calculated by adding the typical model product weightobtained by referencing the CFP value of the other company’s server, and other products
are calculated by multiplying the sales amount ratio to the main Canon product.
Note 6.	Calculated by multiplying totals for each capital goods purchases category by category units
Note 7.	Total fuel and power consumed at each site totaled and multiplied by units from fuelextraction through combustion/power generation
Note 8.	For distribution arranged by Canon MJ from the warehouse to the business partner/end
user, the figure is calculated by multiplying the distance traveled obtained by aggregatingeach delivery step by the respective environmental load conversion coefficient.
Note 9.	Materials-specific waste amounts at each site added, multiplied by materials waste
disposal units
Note 10.	Total payments per transportation mode multiplied by units per mode. For
accommodations, total amounts paid converted into average number of nights, formultiplying by accommodation units.
Note 11.	Total payments per transportation mode multiplied by units per mode. In the case ofprivate car commuting, after converting the total mileage associated with commuting tofuel usage, add by multiplying the unit of fuel combustion.

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Canon Marketing Japan Inc. I Integrated Report 2021

Number of directors
In-house (men)In-house (women)
In-house total
Outside (men)Outside (women)

Note 12.	Encompassing leased buildings and vehicles and included in Scope 1 and 2
Note 13.	Calculated by determining average transportation distances and weights of distributed
products multiplied by transportation units
Note 14.	Main Canon products are calculated by determining the lifetime power consumption foreach product, multiplied by average electric power units, and externally purchased
personal computers, servers etc. are calculated by determining the typical model
lifetime power consumption, and other products are calculated by multiplying the sales
amount ratio to the main Canon product.
Note 15. M ain Canon products are calculated by classifying the sold products into material
categories, and multiplying each material weight by the waste process units, andexternally purchased personal computers, servers etc. are calculated by converting to
the typical model product weight obtained by referencing the CFP value of the othercompany’s server, and other products are calculated by multiplying the sales amountratio to the main Canon product.
Note 16.	Calculated by determining annual power consumption of each leased product multipliedby average power consumption units
Note 17.	Scope of data aggregation covers ISO14001:2015 certified sites as of August 17, 2021.
Note 18.	Scope of data aggregation covers all Canon MJ Group companies (domestic only) as ofDecember 31, 2021.
Note 19.	Sales unit = Total emissions ÷ Externally announced figure of consolidated net sales
Note 20.	Total weight after excluding simple incineration and landfill disposal from total volumesof products recovered and processed from marketplace
Note 21.	Amounts recycled divided by total volume of products recovered and processed frommarketplace
Note 22. The figure in parentheses indicates the number of males.
Note 23. The figure in parentheses indicates the percentage of returning to work that were male.
Note 24. Averages for directors and Audit & Supervisory Board members
Note 25. At December 31 each year

Outside total
Total
Number of Audit & Supervisory Board members
In-house (men)In-house (women)
In-house total
Outside (men)Outside (women)
Outside total
Total
Average age of corporate officers (Notes 24 and 25)
Number of Board of Directors’ and Audit & Supervisory
Board meetings
Number of Board of Directors’ meetings
Number of Audit & Supervisory Board meetings
Number of executive officers

Canon Marketing Japan Inc. I Integrated Report 2021

104

Corporate Data / Investor Information

Canon MJ GroupAs of December 31, 2021

Position within the Canon Group

Third-Party Assessments / Awards Received
Canon MJ has been selected in the FTSE4Good Index Series for 18 consecutive years since fiscal 2004, and in the FTSE Blossom
Japan Index for five consecutive years since fiscal 2017.

Canon Marketing Japan Inc.

In addition, we have been included in numerous indexes, such as being selected in the SOMPO Sustainability Index for 11 consecutive
years since 2012, and in the MSCI Japan ESG Select Leaders Index, a general ESG index developed by MSCI Inc., for four consecutive
years since 2018.

Markets Canon products and services in Japan andprovides its unique IT solutions.

Canon
EuropeTHE INCLUSION OF Canon Marketing Japan Inc. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,

Canon
Asia
Marketing

ENDORSEMENT OR PROMOTION OF Canon Marketing Japan Inc. BY MSCI OR ANY OF ITS AFFILIATES.

Canon
Marketing
Japan

Canon
Inc.

Canon
U.S.A.

THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Research, development,
and manufacturing ofCanon products

Canon
Australia

Selected as “DX-certified operator” by Ministry of Economy, Trade and Industry
In June 2021, we acquired certification as a “DX-certified operator” under the DX(digital transformation) certification program established by the Ministry of
Economy, Trade and Industry. Canon MJ is making changes to its businessportfolio to make IT solutions the core business as set forth in the Medium-Term
Management Plan that has been underway since 2021.

Segment

Company name

Canon IT Solutions Inc., SuperStream Inc., Qualysite Technologies Inc., Canon Software America, Inc.,Enterprise BU

Canon Information Systems (Shanghai) Inc., Canon IT Solutions (Thailand) Co., Ltd.,
Material Automation (Thailand) Co., Ltd.

Area BU

Canon System & Support Inc., A&A Co., Ltd.

Production Printing

Canon Production Printing Systems Inc.

Healthcare

Canon ITS Medical Inc.

Professional BU

BPO Services
Service & Support
The Group comprises 14 consolidated subsidiaries.

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Canon Marketing Japan Inc. I Integrated Report 2021

Canon BizAttenda Inc., Canon Business Support Inc.

Canon Customer Support Inc.

Received “Excellent” rating in the Information Technology Federation of Japan Cyber Index Corporate Survey 2021
In November 2021, the Information Technology Federation of Japan, which is an IT industrial association with approximately 5,000
member companies, announced the results of its assessments in its survey into initiatives for cyber security, etc. by companies
included in the Nikkei 500 stock average. We were ranked 42nd out of the surveyed companies, which was within the top 10%, andearned the assessment of “Excellent.”

Acquired first place in Nikkei Computer’s Partner Satisfaction Survey 2021 and Customer Satisfaction Survey 2021-2022
For the ninth consecutive year, we acquired first place in the security products division in the Nikkei Computer Customer Satisfaction
Survey 2021-2022. Also for the second consecutive year, we acquired first place in the security threat products / services division in
the Nikkei Computer Partner Satisfaction Survey 2021.

Acquired silver medal in the Japan Patent Office’s first AI competition
At the Japan Patent Office’s first machine learning competition “AI x Trademark: Image Search Competition (to detect similar trademark
images),” which was held over two months from November 2021, the team of Advanced Technology Development Division of Canon IT
Solutions R&D Headquarters was awarded 13th place and received a silver medal. (Among the participating teams, the top 10% received
gold medals, then those between 10% and 20% received silver medals and those between 20% and 40% received bronze medals.)

Canon Marketing Japan Inc. I Integrated Report 2021

106

Corporate Data / Investor Information

Corporate Information
As of December 31, 2021

Trade Name

Canon Marketing Japan Inc.

Description ofBusiness

Domestic marketing of Canon products and related solutions

Date of
Establishment

February 1, 1968

Number of
Employees

Consolidated: 16,220
Non-consolidated: 4,787

Common Stock¥73,303 million

Main Locationsof Operations

Headquarters, Konan office, Makuhari office and branches(Sapporo, Sendai, Nagoya, Osaka, Hiroshima, and Fukuoka)

Headquarters

16-6, Konan 2-chome, Minato-ku,
Tokyo 108-8011, Japan

Stock Listing

The Tokyo Stock Exchange, the Prime Market (from April 4, 2022)
Securities code: 8060

Major Shareholders

Status of Shares
Number of shares
held (Thousands)

Percentage ofownership (%)

Canon Inc.

75,70858.4

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

7,760

6.0

Canon Marketing Japan Group Employee
Stock Ownership Association

5,843

4.5

Custody Bank of Japan, Ltd. (Trust
Account)

2,742

2.1

Shareholder Composition

STATE STREET BANK AND TRUSTCOMPANY 505001

1,563

1.2

1.1%

THE BANK OF NEW YORK, TREATYJASDEC ACCOUNT

1,417

1.1

Canon Marketing Japan Group Business
Partner Stock Ownership Association

1,247

1.0

SMBC Nikko Securities Inc.

1,008

0.8

1,001

0.8

975

0.8

Name of shareholder

Mizuho Bank, Ltd.
Custody Bank of Japan, Ltd. (Trust
Account 9)

Total number of shares authorized

299,500,000 shares

Number of shares issued

131,079,972 shares

Number of shareholders

11,747

13.3%

12.7%

1.5%

IR Activities
The Company aims to build long-term relationships of trustwith everyone participating in capital markets and acquire
suitable appraisals by making timely, appropriate and fairdisclosure of not only financial information but also nonfinancial information, and by enhancing opportunities for
dialogue. In addition, we strive to report insights andassessments brought to light through dialogue to the Boardof Directors and the Management Committee, etc. and reflect
them in the Company’s management in order to achieve
improvements in corporate value over the medium to longterm. We have established the Canon MJ IR Policy to clarify
our stance to IR disclosure, which is disclosed on the investor
relations (IR) website.

Scope

Individual investors• Renewal of website for individual investors•D istribution of email newsletter by personnel in charge of IR•H olding of medium- and long-term management plan
briefing by the Representative Director (held online)
Securities analysts•H olding of financial results briefing by the managing
Institutional investors
executive officer overseeing IR (held online)(Japanese and overseas)•Holding of individualized IR information sessions•Holding of small theme-specific meetings

Canon MJ maintains a comprehensive investor relations (IR) website tofurther facilitate communication with shareholders. The website contains:•News for investors •IR calendar■Financial Institutions•Financial results and other financial information■Securities Companies■Other Domestic Companies•Information on Long-Term Management Objectives (2021-2025) andMedium-Term Management Plan (2022-2025)■Foreign Companies, etc.

•Stock information •Integrated reports■Individuals and Others■Treasury Stock

12.5%

canon.jp/8060e-ir

58.9%

Editors’
postscript*T he percentage of ownership is calculated by deducting the number of treasury
shares from the total number of issued shares.

Stock Price Range and Trading Volume

2,500

8,000,000

2,000
6,000,000
1,500
4,000,000

Editors of Integrated Report 2021

1,000
2,000,000

500

107

Mar.

May

Jul.

Sep.

Nov.

2020
Jan.

Canon Marketing Japan Inc. I Integrated Report 2021

Mar.

May

Jul.

Sep.

Nov.

2021
Jan.

Mar.

May

Jul.

Sep.

Nov.

2022
Jan.

0
Mar.

May

In our first theme, we aim to communicate the Company’s growthstory with a focus on finding solutions to social issues not only
through the Canon product business that constitutes the revenue
base, but also through expanding the IT solutions business that we
position as our growth area.
In our second theme, we discuss our personnel, which supports
such growth, and we strive to build understanding on how best to
maximize the value of human capital by explaining systems andinitiatives of the Canon MJ Group.

■ Trading Volume (Shares)
10,000,000

Stock Price (Yen)
3,000

2019
Jan.

•C
 ompany briefings (online) are held twice by the
managing executive officer overseeing IR or otherexecutives

Canon MJ Investor Relations Website* The Company possesses 1,404,790 shares of its treasury shares (1.1% of the total
number of issued shares).

0

Results of Activities in Fiscal 2021

Thank you for reading the Integrated Report 2021.
This year’s report is the Canon MJ Group’s third integrated report. It
presents two themes: “visualization of growth stories” and“personnel for realizing growth.”

In addition, we have been steadily developing the foundations forpromoting sustainability management, through such measures asestablishing the Sustainability Promotion Committee, endorsing the
TCFD, and providing disclosure of materiality. We will further
strengthen initiatives to present non-financial information so that it
can be viewed as a story that shows how such activities can have aneffect on future and present corporate value.
We will continue to treat opportunities for dialogue with our
stakeholders as very important going forward, and invite you toshare your unreserved opinions and impressions with us.

Takuya Joshin Group Executive of Corporate Planning Headquarters
Canon Marketing Japan Inc. I Integrated Report 2021

108