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

To Our Shareholders

Other Matters to Be Provided
Electronically for the 56th Ordinary
General Meeting of Shareholders(Matters Omitted in the Document to
Be Delivered)BUSINESS REPORT
Current Conditions of Canon Marketing Japan and its consolidated
subsidiaries (the “Group”)(1) Status of Assets and Earnings(2) Main Business(3) Main Location of Operations
Status of Shares of the Company
Status of Accounting Auditor
Systems for Ensuring Appropriateness of Business Operations and Outline of
Implementation Activities
Stock Acquisition Rights etc. of the Company
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Shareholders’ Equity
Notes to Consolidated Financial Statements
NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Income
Non-Consolidated Statements of Shareholders’ Equity
Notes to Non-Consolidated Financial Statements
AUDIT REPORT OF ACCOUNTING AUDITOR ON CONSOLIDATEDFINANCIAL STATEMENTS
AUDIT REPORT OF ACCOUNTING AUDITOR ON NON-CONSOLIDATEDFINANCIAL STATEMENTS

Canon Marketing Japan Inc.

BUSINESS REPORT
Current Conditions of Canon Marketing Japan and its consolidated subsidiaries (the“Group”)(1)

Status of Assets and Earnings
Consolidated
52nd Fiscal
Year(Jan. 1, 2019
to Dec. 31,
2019)

53rd Fiscal
Year(Jan. 1, 2020
to Dec. 31,
2020)

54th Fiscal
Year(Jan. 1, 2021
to Dec. 31,
2021)

55th Fiscal
Year(Jan. 1, 2022
to Dec. 31,
2022)

56th Fiscal
Year(Jan. 1, 2023
to Dec. 31,
2023)

621,134

545,060

552,085

588,132

609,473

32,43931,317

39,69949,94752,49533,93735,236

41,09650,99153,585

Net income attributable toowners of parent (Millions ofyen)

22,25021,99729,42035,55236,493

Net income attributable toowners of parent per share (Yen)

171.60169.65226.88274.16281.41

Total assets(Millions of yen)503,698

506,604

526,418

543,740

557,366

Net sales(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)

Equity325,092
346,114374,676
400,372435,509(Millions of yen)
Note: Net income attributable to owners of parent per share is calculated based on the weighted average number ofoutstanding shares during the fiscal year.

(2)

Main Business
Segment
Consumers
Enterprise
Area

Professional

Business
Sells products such as digital cameras and inkjet printers primarily to individual
customers.
Provides Canon input and output devices and provides solutions that contribute to solving
business problems in each industry, primarily for major corporations, quasi-major
corporations, and upper-medium-sized businesses.
Sells Canon input and output devices and provides solutions that help customers solve
business problems, primarily for small and medium-sized businesses in Japan.
Provides solutions for customers in each area.
(Production Printing) Provides high-speed continuous feed printers and high-speed cut
sheet printers to the printing industry.
(Industrial Equipment) Provides products such as semiconductor manufacturing systems
and inspection and measurement devices mainly to semiconductor manufacturers andother electronics device manufacturers.
(Healthcare) Provides IT solutions, system development, network construction, andhardware primarily for the medical and healthcare field.

(3)Main Location of Operations
The Company
Headquarters
Tokyo
Konan Office
Makuhari
Chiba
OfficeSapporoHokkaido
BranchSendai Branch
Miyagi
Nagoya Branch
Aichi
Osaka Branch
Osaka
Hiroshima
Hiroshima
BranchFukuoka
Fukuoka
BranchPrincipal Subsidiaries
Canon IT Solutions Inc.
Canon System & Support Inc.
Canon Production Printing Systems Inc.

Tokyo

Status of Shares of the Company(1) Total Number of Shares Authorized 299,500,000 shares(2) Total Number of Issued Shares, Common Stock, Number of Shareholders
As of the end of thePrevious Fiscal Year

Change during This
Fiscal Year

Total number of issued shares(shares)

131,079,972-

131,079,972

Capital stock (yen)73,303,082,757-

73,303,082,757

Number of shareholders(persons)

11,166

As of the end of This
Fiscal Year

Decrease of 268

10,898(3) Major Shareholders
Number of Shares
Held (thousands ofshares)75,708
8,517

Name of Shareholders

Shareholding Ratio(%)

Canon Inc.
58.4
The Master Trust Bank of Japan, Ltd. (Trust account)
6.6
Canon Marketing Japan Group Employee Stock Ownership
5,276
4.1
Association
Custody Bank of Japan, Ltd. (Trust account)
4,069
3.1
STATE STREET BANK AND TRUST COMPANY 505001
1,525
1.2
Canon Marketing Japan Group Business Partner Stock Ownership
1,250
1.0
Association
The Bank of New York, Treaty JASDEC Account
1,135
0.9
Mizuho Bank, Ltd.
1,001
0.8
The Dai-ichi Life Insurance Company, Limited
879
0.7
BNYM SANV BNYMIL LF Morant Wright Japan Fund600
0.5Note : The shareholding ratio is calculated by deducting the number of treasury shares (1,40 1,615 shares) from thetotal number of issued shares.
(4) Shareholding Ratio by Category
Financial
institutions

13.3%

Securities companies 1.0%

Other domestic companies

59.1%

Foreigncompanies, etc.

13.2%

Individuals
and others

12.3%

Treasury shares 1.1%

Status of Accounting Auditor(1)

Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC(2) Remuneration and Other Amounts to Accounting Auditor for This Fiscal Year
Amount(i) Remuneration and other amounts payable by the Company for the services defined in
Paragraph 1, Article 2 of the Certified Public Accountants Act¥121 million(ii) Total amount of cash and other financial benefits payable by the Group to the Accounting
Auditor¥185 million

Notes: 1. In the audit agreement between the Company and the Accounting Auditor, remuneration amounts are determinedon a lump-sum without breakdown into a separate remuneration amount for auditing in accordance with theCompanies Act and in accordance with the Financial Instruments and Exchange Act. Accordingly, the amounts
shown in (i) above represent total amounts of remuneration and other amounts for both of these auditing services.
2. The Company pays consideration to accounting auditors for work concerning agreed upon procedures other than
the work specified in Article 2, Paragraph 1 of the Certified Public Accountings Act.
3. Reason that the Audit & Supervisory Board reached an agreement regarding the remuneration to Accounting
Auditor: The Audit & Supervisory Board has received necessary documents and reports from the Directors, related
internal divisions, and the Accounting Auditor, in addition to confirming the audit plan, status of the performed
audit for the previous fiscal year, and the estimated remuneration for this fiscal year. As a result, the Audit &Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor, upon judging it to bea rational level for maintaining and improving audit quality.

(3) Policy Regarding Decision on Either Dismissal or Non-Reappointment of the Accounting Auditor
The Audit & Supervisory Board, by unanimous agreement, as needed, will dismiss the Accounting Auditor
when confirmed that the Accounting Auditor falls under any Item of Paragraph 1, Article 340 of the Companies
Act.
In addition to the above, should anything occur to negatively impact the qualifications or independence of
the Accounting Auditor, making it unlikely that the Accounting Auditor will be able to properly perform anaudit, the Audit & Supervisory Board will decide the contents of the item to be proposed at a General Meetingof Shareholders regarding the dismissal or non-reappointment of the Accounting Auditor.

Systems for Ensuring Appropriateness of Business Operations and Outline of Implementation
Activities
The content of the resolution of the Board of Directors regarding the systems necessary to ensure the appropriateness of
the Company’s operations (basic policy) as well as the outline of implementation activities for the aforementioned
systems, are as follows:
Systems for Ensuring
Appropriateness of
Operations(the “Internal Control
System”)

1. System for Compliance (Item 6,
Paragraph 4, Article 362 of theCompanies Act of Japan (the“Companies Act”), and Item 4,
Paragraph 1, Article 100 of the
Enforcement Regulations of theCompanies Act)

Content of Basic Policy Resolution
To ensure the appropriateness of operations and to work for continuous improvement incorporate value, Canon Marketing Japan Inc. (the “Company”) and the enterprises consistingof the Company and its consolidated subsidiaries (the “Group”), shall foster a sound corporate
culture based on the Spirit of “Three Self” (Self-motivation, Self-management, and Selfawareness) – guiding principles of Canon Group (Canon Inc., parent company of theCompany, and its subsidiaries). The Group shall also work to foster a law-abiding awarenessthrough the “Canon Group Code of Conduct.” Furthermore, the Group shall firmly strive toensure management transparency through clearly defined approval processes of importantmatters of the Group.
Content of Basic Policy Resolution(1) The Board of Directors, in accordance with regulations prescribed by the Board of
Directors (the “Regulations of the Board of Directors”), shall make decisions onimportant the Group managerial matters after careful deliberation. Additionally, theBoard of Directors shall have representative directors, executive directors and executive
officers (collectively the “Officers”) give reports regarding their execution of duties.
(2) The Company shall thoroughly instill compliance awareness through training and otherprograms geared towards new employees, managers, and newly-appointed board
members and executive officers, utilizing the “Canon Group Code of Conduct,” as astandard to be adhered to in the execution of duties.
(3) As a part of the Company’s risk management system, the Company shall put in placebusiness procedures/checking systems that prevent violation of laws and regulations
and the Company’s articles of incorporation in the course of daily business. It shall also
maintain a compliance education system.
(4) The internal audit office of the Company, which has the authority to audit all
executions of duties, shall also conduct audits regarding the status of compliance withlaws and regulations and the Company’s articles of incorporation.
(5) If an act that violates laws and regulations, or the Company’s articles of incorporation
is discovered in the Group, employees have the ability to report such fact by means of awhistleblowing system. Additionally, the Company shall prohibit any disadvantageous
treatment of any whistleblower.
Outline of Implementation Activities(1) During this year, 13 Board of Directors meetings were held. At these meetings, inaddition to deliberating and deciding on important matters, the Board of Directors
received reports from Directors in charge of major divisions concerning the executionof business. Besides the above-mentioned number of held Board of Directors meetings,
there were two written resolutions by which a board resolution is deemed to have been
made under Article 370 of the Company Law and Article 22 of the Articles ofIncorporation of the Company.
(2) Compliance training that follows the “Canon Group Code of Conduct” wasimplemented.
(3) The activity is described in 2 Outline of Implementation Activities, (1) below.
(4) The internal audit office conducts audits of each division and subsidiaries for various
themes. The results of these audits have been then reported to the President and each
Audit & Supervisory Board Member, and when necessary, proposals for improvement
are given.
(5) The rules on use of the whistleblowing system, including the explicit prohibition of thedisadvantageous treatment of whistleblowers, are disseminated via the intranets of theCompany, along with information on the contact counter for reporting internal
problems. In this year, there were no whistleblower reports relating to serious violationsof laws and regulations, or the like.

52. System for Risk
Management (Item 2,
Paragraph 1, Article 100 of
the Enforcement
Regulations of theCompanies Act)

Content of Basic Policy Resolution(1) The Company shall conduct various measures with regard to improving the risk management
system in accordance with the regulations regarding risk management. These measures
include the system for grasping any significant risks (violation of laws and regulations,misstatement of financial reporting, quality issues, work-related injuries, disasters, etc.) that
the Group may face in the course of business. Additionally, the Company shall evaluate thestatus of design and implementation of the risk management system and report its findings to
the Board of Directors.
(2) The Company established the Management Committee, and the Committee shall carefully
deliberate items in case it is considered important even if items are not submitted to the Boardof the Directors.
Outline of Implementation Activities(1) The Group categorized the risks which may cause significant impact on the Group into 4risks of Laws and Regulations Violation risk, Disaster and Pandemic risk, Financial risk andBusiness risk, in accordance with the “Regulations of Risk and Crisis Management.” The
Group conducted various measures with regard to the risk management system. Additionally,
the Company evaluated the status of design and implementation of the risk management
system based on the activity plan approved by the Board of Directors.
(2) The Management Committee was held 12 times in this year, and important matters weredeliberated. In addition to the Directors in charge of executing business operations, Audit &Supervisory Board Members also attended, as necessary, and provided their opinions.

3. System for Efficient
Execution of Duties (Item3, Paragraph 1, Article 100of the Enforcement
Regulations of theCompanies Act)

Content of Basic Policy Resolution(1) Based on regulations regarding approval processes of important matters and the division ofduties adopted by the Board of Directors, the Directors and other officers shall execute shared
duties under the supervision and direction of the President.
(2) The Company shall formulate Long-Term Management Objectives as 5-year management
goals and 3-year priority measures, contained in Mid-Term Management Plan (Three-YearManagement Plan) at its Management Committee. Based upon these plans, the Company
shall manage operations from a unified group approach.
Outline of Implementation Activities(1) The Officers have executed the duties allocated to them in accordance with the related rules.
(2) The Company decides on a mid-term management plan and the necessary measures, which is
decided based on discussions such as held at the Management Committee attended by the
Officers of the Company and the executive officers of the major subsidiaries, and ensures thecohesion of the Group’s corporate management.

6

4. System for GroupManagement (Item 5,
Paragraph 1, Article 100 of
the Enforcement
Regulations of theCompanies Act)

Content of Basic Policy Resolution
The Company strengthens the internal control system by requiring subsidiaries to follow therespective items:a) to obtain prior approval from the Company or report to the Company important decisions inaccordance with the “Regulations of Important Matters Approval of Canon MJ Group
Companies,” prescribed by the Board of Directors,b) to grasp significant risks that the subsidiary may face in the course of business and to verify andevaluate the status of design and implementation of the risk management system and report theirfindings to the Company in accordance with the regulations regarding risk management,c) to design an appropriate organization under the governing law of incorporation and to clearly
define approval processes and authorities of executive officers,d) in addition to thoroughly instilling compliance awareness through the “Canon Group Code of
Conduct,” to put in place business procedures/checking systems that prevent violation of laws
and regulations and subsidiaries’ articles of incorporation in the course of daily business andprepare a compliance education system as a part of subsidiaries’ risk management system, ande) to establish a whistleblowing system and prohibit any disadvantageous treatment of any
whistleblower.
Outline of Implementation Activitiesa) The Company received reports from subsidiaries or provided prior approval in accordance withthe “Regulations of Important Matters Approval of Canon MJ Group Companies.”b) In order to conduct evaluation of the status of design and implementation of the risk
management system described in 2 Content of Basic Policy Resolution, (1) above, thesubsidiaries being evaluated implemented evaluation of the respective targeted risks.
c) Each subsidiary performs, as appropriate, a review of the appropriateness of organizational
design, and approval criteria and processes in accordance with the applicable laws andregulations and the nature of business and other factors.
d) In addition to the activities of 2 Outline of Implementation Activities, (1) above, each subsidiaryestablishes places for training and discussion as necessary and ensures utmost compliance.
e) Each subsidiary establishes an in-house hotline system and totally prohibits any
disadvantageous treatment of any whistleblower.

5. System for Storing andManaging Information(Item 1, Paragraph 1,
Article 100 of the
Enforcement Regulationsof the Companies Act)

Content of Basic Policy Resolution
Information related to the execution of duties of Officers, including meeting minutes of the Boardof Directors and approval documents, shall be maintained and managed by respective divisions incharge of such management in accordance with laws and regulations, the “Regulations of theBoard of Directors,” and other related rules. Directors and Audit & Supervisory Board Members
have the ability to inspect this information at any time.
Outline of Implementation Activities
Whenever deemed necessary, Directors, Audit & Supervisory Board Members and members of
the internal audit office inspect or obtain copies of minutes of the Board of Directors meeting,minutes of the Management Committee, and other records such as approvals by the President.

76. System for Auditing by Audit &Supervisory Board Members(Paragraph 3, Article 100 of the
Enforcement Regulations of theCompanies Act)

Content of Basic Policy Resolution(1) Although the Company does not assign a dedicated full-time employee or set anorganization to assist the duties of Audit & Supervisory Board Members, the internal
audit office, the legal division and other divisions will consult and assign an employee
to assist the works of Audit & Supervisory Board Members (the “Assisting
Employee”), on matters requested by Audit & Supervisory Board Members. The
Assisting Employee shall give priority to execute the duties requested by Audit &Supervisory Board Members. Any change in the Assisting Employee shall require theprior consultation of the Audit & Supervisory Board.
(2) Audit & Supervisory Board Members shall grasp the execution of duties by Director
and other officers, by attending not only meetings of the Board of Directors, but also
other important meetings such as meetings of the Management Committee.
(3) The administrative divisions of the headquarters, such as human resources, finance &accounting, and legal affairs, shall hold meetings with Audit & Supervisory Board
Members and report on the execution of duties in a timely manner. Additionally, if any
material breach of laws and regulations occurs, the relevant division shall immediately
report this to Audit & Supervisory Board Members.
(4) Audit & Supervisory Board Members shall be reported from accounting auditors
periodically and upon necessity.
(5) Audit & Supervisory Board Members shall hold periodic meetings with counterparts ofdomestic subsidiaries and work to improve the auditing system from a unified groupperspective by sharing information. Additionally, Audit & Supervisory Board
Members shall grasp the execution of duties by Directors and other officers ofsubsidiaries, by auditing major subsidiaries in and outside Japan as necessary.
(6) The Company prohibits any disadvantageous treatment of any person that reports to
Audit & Supervisory Board Members. The Company also seeks its subsidiaries toprohibit any disadvantageous treatment.
(7) For expenses that are required in the execution of the Audit & Supervisory Board
Members duties, they shall be borne by the Company as requested by the Audit &Supervisory Board Members.
Outline of Implementation Activities(1) The Company assigned the Assisting Employee from the legal division, and theAssisting Employee executed the duties as requested by Audit & Supervisory Board
Members. Change to the Assisting Employee, were decided upon prior consultation
with the Audit & Supervisory Board.
(2) Audit & Supervisory Board Members, including Outside Audit & Supervisory Board
Members, attended Board of Directors meetings and important meetings such as theManagement Committee meetings, and the executive officers meetings.
(3) The administrative divisions of the headquarters held periodic meetings with the Audit& Supervisory Board Members, and reported the status of execution of business
operations. In addition, the internal audit office reported the results of audits to not only
the President but to Audit & Supervisory Board as well.
(4) Audit & Supervisory Board Members, in addition to periodically receiving reports
from the Accounting Auditor on the results of the audit of this year in accordance withlaws and regulations, they also hold hearings with the Accounting Auditor to inquire on
the status of audits as necessary.
(5) Audit & Supervisory Board Members, as necessary, held meetings with audit &supervisory board members of domestic subsidiaries and exchanged information. In
addition, Audit & Supervisory Board Members audited the major subsidiaries.
(6) In addition to 1 Outline of Activities, (5) above, the Company did not treat any personthat reported to Audit & Supervisory Board Members disadvantageously.
(7) In this year, there were no situations of shortfalls in the budget allocated for the
implementation of audits in accordance with the audit plan.

8

Stock Acquisition Rights etc. of the Company◼ Stock Acquisition Rights Granted as Compensation for Execution of Duties That Are Held by the Directors(Excluding Outside Directors) of the Company as of the End of This fiscal year

Name
Stock Acquisition
Rights granted in
April of 2022
Stock Acquisition
Rights granted in
April of 2023

Fair value of stockacquisition rights(1 unit is 100 shares)

Exercise price(per share)

Exercise period

260,600 yen

1 yen

April 29, 2022 toApril 28, 2052

314,900 yen

1 yen

April 29, 2023 toApril 28, 2053

Holder, number ofholders, number of units,
and class and number ofshares to be acquired
Director
4 persons, 72 units, 7,200
shares of common stock
Director
4 persons, 70 units, 7,000
shares of common stock◼ Stock Acquisition Rights Granted during This Term to the Executive Officers Who Are in the Positions of Vice
Presidents or Higher (Excluding Persons Serving Concurrently as Directors) of the Company as Compensation
for Execution of Duties

Name

Stock Acquisition
Rights granted in
April of 2023

Fair value of stockacquisition rights(1 unit is 100 shares)

Exercise price(per share)

Exercise period

314,900 yen

1 yen

April 29, 2023 toApril 28, 2053

Grantee, number ofgrantees, number of units,
and class and number ofshares to be acquired
Executive officers who arein the positions of vicepresidents or higher
6 persons, 76 units, 7,600
shares of common stock[Main Conditions for the Exercise of Stock Acquisition Rights]
In principle, in accordance with the provisions of the stock acquisition rights agreement between the Company
and a holder of the stock acquisition rights, the number of granted stock acquisition rights that may be exercisedby such holders is adjusted (range from 0% to 100% of granted) based on the level of consolidated net income
before taxes for the fiscal year that stock acquisition rights was granted an d the holder of the stock acquisitionrights shall be entitled to exercise the number of exercisable stock acquisition rights only in a lump sum within aperiod of 10 days (or the next business day, if the tenth day is a holiday) from the day immediately f ollowing the
day when they cease to hold any position as Executive Officers who are in the positions of Vice Presidents or
higher (including persons serving concurrently as Directors; hereinafter referred to as “Eligible Officers”) of theCompany.
(Note) About Stock Acquisition Rights adjusted in April of 2023
Holder, Number of Holders, number of units, and class and number of shares to be acquired after adjustment
above.
Director
4 persons46 units 4,600 shares of common stock
Executive officers who are in thepositions of vice presidents or
6 persons
50 units 5,000 shares of common stock
higher

The amount and the number of shares described in this report are rounded down to the nearest number of the units
indicated. Net income attributable to owners of parent per share are rounded off to two decimal places.

9

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Shareholders’ Equity
From January 1, 2023 to December 31, 2023
(Amounts less than one million yen are truncated)
Shareholders’ equity
Common stock Capital surplus
Balance at beginning of the year

Retainedearnings

Treasury stock

Total
shareholders’equity¥73,303¥82,827¥233,354¥(2,092)¥387,392

Cash dividends--(12,967)-(12,967)

Net income attributable to owners of the parent--

36,493-36,493Purchase of treasury stock

-

-

-

(4)

(4)

Disposition of treasury stock

-

4

-

4

9

Additional purchase of shares of a consolidated
subsidiary

-

(104)

-

-

(104)

Net income attributable to non-controlling interests

-

-

-

-

-

Cash dividends paid to non-controlling interests

-

-

-

-

-

Net changes in items other than shareholders’ equity

-

-

-

-

-

-

(100)

23,525023,425¥73,303¥82,727¥256,880¥(2,092)¥410,817

Changes during the year

Total changes during the year
Balance at end of the year

Accumulated other comprehensive income (loss)
Deferred gain
Total
Unrealized gain
(loss) on
Foreignaccumulated(loss) on
Definedotherderivatives
currency
available-forsale
retirement
comprehensive
under hedgetranslation
securities
benefit plansincome (loss)
accounting
adjustments
Balance at beginning of the year

StockacquisitionrightsNon-controllinginterests

Total equity¥5,202

¥(14)

¥293

¥6,667¥12,149¥29¥801¥400,372

Cash dividends

-

-

-

-

-

-

-

(12,967)

Net income attributable to owners of the parent

-

-

-

-

-

-

-

36,493Purchase of treasury stock

-

-

-

-

-

-

-

(4)

Disposition of treasury stock

-

-

-

-

-

-

-

9

Additional purchase of shares of a consolidated
subsidiary

-

-

-

-

-

-

-

(104)

Net income attributable to non-controlling interests

-

-

-

-

-

-

90

90

Cash dividends paid to non-controlling interests

-

-

-

-

-

-

(22)

(22)
11,643

Changes during the year

Net changes in items other than shareholders’ equity

1,657

101

51

9,942

11,75329(139)

Total changes during the year

1,657

101

51

9,942

11,75329(71)

35,137

Balance at end of the year

¥6,860¥87¥345¥16,610¥23,903¥58¥729¥435,509

10

Notes to Consolidated Financial Statements(Notes on important items forming the basis of consolidated financial statements)
1. Scope of consolidation(1) Consolidated subsidiaries・・・・・・・・・ 14
Major consolidated subsidiaries・・・・・・ Canon IT Solutions Inc., Canon System & Support Inc., Canon
Production Printing Systems Inc.
TCS Inc. (former TOKYO NISSAN COMPUTER SYSTEM CO., LTD.) became a subsidiary as a result of a shareacquisition and thus is included in the scope of consolidation from the fiscal year.
(2) Non-consolidated subsidiaries・・・・・・・ None
2. Application of equity method(1) Affiliates subject to equity method・・・・・ None
(2) Affiliates not subject to equity method・・・・ None

3. Fiscal years for consolidated subsidiaries
Of the consolidated subsidiaries, a fiscal year-end of TCS Inc. is March 31.
In preparing the consolidated financial statements, the Company uses financial statements based on the provisional closing
financial statements as of December 31. The year end of the other consolidated subsidiaries is December 31.
4. Accounting policies(1) Valuation standards and methods for key assets(i) Securities
Held-to-maturity securities・・・・・・・ Amortized cost (straight-line method)
Other securities
Securities other than shares, etc. that
do not have a market price・・・・・

Shares, etc. that do not have amarket price・・・・・・・・・・(ii) Inventory assets
Merchandise・・・・・・・・・・・

Repair parts・・・・・・・・・・・

Work in process・・・・・・・・・・
Supplies・・・・・・・・・・・・・

Fair value(Valuation differences included in total net assets, cost of products
sold calculated based on moving-average method)
At cost based on moving-average method

At cost based on monthly moving-average method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)
At cost based on monthly moving-average method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)
At cost based on specific identification method
Last-purchase price method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)11(2) Method of depreciation for key depreciable assets(i) Property, plant and equipment(Excluding Leased assets, net)・・・・・ Based on declining-balance method
Rental assets and selected consolidated subsidiaries are depreciatedby the straight-line method.
Buildings acquired on or after April 1, 1998 (excluding furniture andfixtures), and related furniture, fixtures and structures acquired on
or after April 1, 2016, are depreciated by the straight-line method.
Useful lives are as follows:
Buildings and structures, net
Furniture and fixtures, net
Rental assets, net

3 years to 75 years
2 years to 20 years
3 years(ii) Intangible assets(Excluding Leased assets, net)・・・・・・Based on straight-line method
Software for sale is amortized based on the larger of theamortization amount based on expected sales volume or expectedsales revenue or the equally allocated amount over the expected
effective period (up to 3 years). In-house software is depreciated thestraight-line method based on the length of in-house durability (5years).
Customer-related intangible assets are generally amortized by thestraight-line method based on the period when they are estimated tobe generated income from recorded date.
(iii) Leased assets, net・・・・・・・・・

Lease assets, net are depreciated by the straight-line method basedon their useful life, which is lease period, with zero residual value.

(3) Standards for recording key allowances(i) Allowance for doubtful receivables・・・ To cover possible losses on collection, general accounts
receivables are calculated based on the actual rate of uncollected
receivables, and doubtful account receivables based on individuallyestimated uncollectible amounts for specific items.
(ii) Accrued bonuses・・・・・・・・・・ The estimated payable for current year’s portion of employees’
bonus is recorded based on the next round payment.
(iii) Accrued directors’ bonuses・・・・・・ The estimated payable for current year’s portion of directors’
bonus is recorded based on the next round payment.
(iv) Accrued product warranties・・・・・・ Costs arising from a one-year free warranty contract for consumer
products are recorded based on the actual cost of free repairs.
To cover payment of free program maintenance and repairs forselected consolidated subsidiaries, the estimated amount of future
costs is recorded based on actual figures for previous years.
(v) Accrued loss on order received・・・・ The estimated amount of losses from the following fiscal year
onwards is recorded for order contracts as of the end of the current
fiscal year, in cases that are expected to result in a loss in the future(as of the end of the current fiscal year) and in which it is possible
to reasonably estimate the relevant losses, in order to cover future
losses on order received.
(vi) Allowance for long-term continuous service rewards・・
The estimated amount payable is recorded in order to cover paymentof rewards to employees in accordance with internal regulations on
long-term continuous service.

12

(4) Accounting methods for retirement benefits(i) Method of aligning estimated retirement benefits・・・・・・・・
Retirement benefit obligations are calculated based on standard benefit
calculation formula, to align the estimated amount of retirement benefits withthe relevant period as of the end of the current consolidated accounting year.
(ii) Method of recording actuarial differences and prior service costs・・
Prior service costs are generally expensed using the straight-line method basedon a certain number of years within the average remaining years of service forthe relevant employee at the time of incurring costs. Actuarial differences are
generally expensed from the following consolidated accounting year, using thestraight-line method based on a certain number of years within the averageremaining years of service for the relevant employee at the time of incurringcosts.
(iii) Using simplified methods for small companies, etc.・・・・・・・
For selected consolidated subsidiaries, simplified methods are applied in orderto calculate retirement benefit liabilities and costs. This entails listing
retirement benefit obligations as the amount payable in retirement benefits at
the end of the year, based on the relevant company’s circumstances.
(5) Standards for recording key revenue and expenses
The details of the main performance obligations in key businesses related to revenue from contracts with theGroup’s customers and the usual timing at which the Group typically satisfies these performance obligations(when it typically recognizes revenue) are as described below.
In addition to sale of Canon products and provision of related services, the Group sells products and provides
services in fields such as IT solutions, industrial equipment and healthcare. In the case of sale of a product that
does not require inspection by the customer, usually at the time of delivery of the product, the legal title andphysical possession of the product and significant risks and economic value associated with the ownership of the
product transfer to the customer, and the Group is entitled to receive payment of consideration for the transaction
from the customer. Therefore, the Group judges that performance obligations are satisfied by transferring controlof the product to the customer at this point of time, and recognizes revenue at the time of the delivery of product.
Additionally, in the case of sale of a product that requires inspection by the customer, at the time of completionof inspection by the customer, the legal title and physical possession of the product and significant risks andeconomic value associated with the ownership of the product transfer to the customer, and the Group is entitled
to receive payment of consideration for the transaction from the customer. Therefore, the Group judges that
performance obligations are satisfied by transferring control of the product to the customer at this point of time,and recognizes revenue at the time of completion of inspection by the customer. Provision of services consists
mainly of business equipment maintenance contracts, which are routine or recurring, and therefore the Groupjudges that the performance obligations are satisfied over time as services are provided to customers in accordancewith the contracts and recognizes revenue equally over a given period based on the terms and conditions of thecontract with the customers. In the case of contracts where the Group is entitled to receive consideration from thecustomer for the portion of the performance obligation satisfied according to product usage, the Group judges thatthe customer enjoys benefits according to the usage, and recognizes revenue based on an amount multiplied by aunit price stipulated in the contract according to the usage. Furthermore, consideration for transactions is generally
settled within a short period of time following the time when performance obligations are satisfied, and the amountof consideration promised does not include a significant financing component. For some of the sale of products
and the provision of services, the Group receives consideration for transaction in the form of advance payments.
Conditions peculiar to each reporting segment are as described below. The Enterprise segment and the Area
segment are combined due to the similarity of the products sold and services provided in these two segments.
(Consumers)
The transaction price received by the Group in exchange for products sold includes variable considerations suchas rebates based on the achievement of a specified milestone or other targets. Variable considerations such asrebates are mainly related to products sold for which the main customer base is retailers. Variable considerations
such as rebates are deducted from the transaction price, and rebates are estimated using the expected value method
based on actual figures in previous years and other factors.

13

(Enterprise and Area)
For maintenance and operation services/outsourcing for IT solutions, services are provided to customers in a
uniform manner over the contract duration, and therefore the Group judges that the performance obligations are
satisfied over time and recognizes revenue equally over a given period based on the terms and conditions of thecontract with the customers. In the case of contracts where the Group is entitled to receive consideration from thecustomer for the portion of the performance obligation satisfied according to factors such as hours, workload, etc.,
the Group judges that customer enjoys benefits according to the hours and workload involved in the service andrecognizes revenue based on an amount multiplied by a unit price stipulated in the contract according to hours,
workload, etc. involved in the service.
For SI services that provide custom development of software, if reasonable estimates of progress can be made,since deliverables are transferred to the customer as progress is made on development, the Group recognizes
revenue over the development period in accordance with the progress of development. The Group judges thatcosts incurred are proportional to the progress of development and recognizes revenue using the input method
based on costs incurred (cost-to-cost method) to estimate progress. Additionally, if reasonable estimates ofprogress cannot be made, in the case that expenses involved in the amount of progress made are recoverable, theGroup recognizes revenue based on the cost recovery method.
(Professional)
For SI services that provide custom development of systems in the healthcare field, etc., please refer to therelevant performance obligations detailed in the Enterprise and Area segments.

14(6) Key hedge accounting methods(i) Hedge accounting method・・・・・・ Appropriation accounting is applied to foreign currency
denominated payables subject to forward exchange contracts inline with accounting requirements.
(ii) Hedging instrument and subject
Hedging instrument・・・・・・・・・ Forward exchange contracts
Subject of hedging・・・・・・・・・ Foreign currency denominated payables(iii) Hedging policy・・・・・・・・・・・ Measures are taken to hedge against the risk of cash flow
fluctuations due to exchange rate fluctuations in the future, in
relation to foreseeable foreign currency denominated payables up
to a certain amount.
(iv) Method of evaluating effectiveness of hedging・・
For forward exchange contracts, the same amount is appropriatedon the same date in the same currency, in accordance with theCompany’s hedging policy. The effectiveness is not evaluated on
the date of settlement of accounts because it is guaranteed tocorrelate with subsequent exchange rate fluctuations.
(7) Goodwill
Goodwill is amortized over a maximum of 20 years using straight-line method.
(8) Other important items forming the basis of consolidated financial statements
Application of the group tax sharing system・・・・・・・・・・・・・・・
The Company and certain domestic consolidated subsidiaries
shifted from the consolidated taxation system to the group tax
sharing system from the fiscal year. As a result, the processes ofaccounting and disclosure for corporate and local income taxes aswell as tax effect accounting have complied with the “Practical
Solution on the Accounting and Disclosure Under the Group Tax
Sharing System” (PITF No. 42, August 12, 2021; hereinafter“PITF No. 42”). In accordance with PITF No. 42, paragraph 32,
item (1), the change in accounting principles associated with theimplementation of PITF No. 42 is deemed to have no impact. Thereis no impact on the consolidated financial statements.
(Notes on changes in accounting policies)(Application of revised Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Group has applied the revised Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021; hereinafter “Implementation Guidance on Fair Value Measurement Standard”)
from the current fiscal year, and will prospectively apply the new accounting policies stipulated by the Implementation
Guidance on Fair Value Measurement Standard in accordance with the transitional treatment provided in Paragraph 272 of the Implementation Guidance on Fair Value Measurement Standard. There is no impact on the consolidated financial
statements.

15

(Notes on accounting estimates)
Recoverability of deferred tax assets
1. Account and amount recorded for the current fiscal year
Account
Amount (millions of yen)
Deferred tax assets¥5,916
2. Other information for the understanding of the details of accounting estimates
The Group estimates the deferred tax assets amounts for future temporary differences for which the timing ofrealization is reasonably estimated. This is because stable taxable income has been achieved during the current fiscal
year, and the Group forecasts as of the end of the current fiscal year that the subsequent business environment is unlikely
to significantly change in the near future. The Company and selected domestic consolidated subsidiaries apply the grouptax sharing system and carry out tax allocation for the application of the group tax sharing system.
The Group considers the estimated future taxable income and business environment to be appropriate as they are
determined based on the best estimate and judgement by management. However, they may be affected by changes infuture business plans and economic environment as well as revision and promulgation of related laws and regulations. If
any need arises for reviews regarding estimated future taxable income and business environment, the amount to berecognized in the consolidated financial statements for the following fiscal year may be affected.
(Notes on consolidated balance sheets)
1. Accumulated depreciation on property, plant and equipment

76,270 million yen

2. Guarantee liabilities
Guarantees for employees’ housing loans

2 million yen

3. The balances of receivables from contracts with customers and contract assets, respectively, are as follows.
Notes receivable-trade
10,776 million yen
Accounts receivable-trade88,122 million yen
Contract assets
11,493 million yen
4. The balance of contract liabilities included in “Other current liabilities” under current liabilities
19,278 million yen(Notes on consolidated statements of income)Amount of revenue from contracts with customers included in net sales

600,333 million yen(Notes on consolidated statements of shareholders’ equity)
1. Class and total number of issued shares as of end of current fiscal year

Common share 131,079,972 shares

2. Dividends paid from retained earnings during the current fiscal year
Resolution
March 29, 2023
Generalshareholders’meeting
July 26, 2023
Board ofDirectors’
meeting

Class of share

Total
Dividends per
dividends
share (yen)(millions of yen)

Base date

Date effective

Commonshare¥6,483¥50

December 31,
2022

March 30, 2023

Commonshare¥6,483¥50

June 30, 2023

August 25, 2023

16

3. Dividends for which the base date falls within the current fiscal year, and the date effective in the following fiscal year

Discussion

Total
Funds used to dividends
Class of share
pay dividends (millions ofyen)March 27,2024 Generalshareholders’meeting

Commonshare

Retainedearnings¥9,077

Dividends per
share (yen)¥70Base date

Date effective

December 31,
2023

March 28, 2024

4. Number of shares subject to stock acquisition rights issued by the Company as of the end of the current fiscal year
Common share

21,000 shares

17

(Notes on financial instruments)
1. Status of financial instruments(1) Policies for financial instruments
As the Group, we limit asset management to financial instruments characterized as very safe, and believe that
financing should mainly be conducted through the use of group funds whenever necessary. We enter into derivativetransactions to hedge against foreign exchange fluctuation risks, but have a policy of not engaging in speculativetransactions.
(2) Details of financial instruments, risks, and systems to control risks
Operating receivables, consisting of notes and accounts receivable, are exposed to customer credit risks. We aim
to mitigate such risks through strict credit control, based on credit data provided by external credit agencies, andthrough credit insurance and other risk-hedging measures.
Short-term loans receivable are mainly loans to the parent company, provided in accordance with internal
regulations on investment and management of funds.
Securities and investments in securities consist primarily of held-to-maturity debt securities and shares incompanies with business ties to the Group, and are exposed to market price fluctuation risks. To counter such risks,
we regularly monitor fair values and the financial condition of companies issuing shares (business counterparties).
For securities other than held-to-maturity debt securities, we continuously review the status of our holdings, taking
into consideration market conditions and relationships with business counterparties.
Trade payables, consisting of notes and accounts payable, are mainly those due within 6 months.
Derivative transactions consist of forward exchange contracts to hedge against the risk of fluctuations in foreign
currency denominated trade payables. With regard to hedge accounting, notes on important items forming the basis
for compiling the aforementioned consolidated accounting documents are outlined under “4. Accounting policies(6) Key hedge accounting methods.”(3) Supplementary explanation of fair values of financial instruments
Values may vary depending on different assumptions, due to the fact that variables are factored into the calculationof fair values of financial instruments.

18

2. Fair values of financial instruments
Book values on consolidated balance sheets as of December 31, 2023, their corresponding fair values, and thedifference between the two are as follows.
Book value on
consolidated balance sheets(millions of yen)
(1) Investments in securities
Total assets

*2.

*3.

Difference(millions of yen)

¥13,706¥13,706―¥13,706¥13,706

―

¥126

¥126

―

(2) Derivative transactions (*3)*1.

Fair value(millions of yen)

Cash and deposits, notes and accounts receivable-trade, securities, short-term loans receivable, and notes andaccounts payable-trade are omitted, because they are comprised of cash and are to be settled in the short term,
meaning that their fair values approximate their book values.
As unlisted shares (book value on consolidated balance sheets: 1,240 million yen) do not have a market value,
they are not included in “(1) Investments in securities” above. As funds from investment partnerships are notsubject to fair value disclosure in accordance with paragraph 24-16 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, June 17, 2021), funds frominvestment partnerships (book value on consolidated balance sheets: 1,367 million yen) are not included in “(1)Investments in securities” above.
Assets and liabilities arising from derivative transactions are indicated in net amounts, whereas items thatamount to a net liability are shown in parentheses.

3. Fair value input hierarchy
Input for financial instruments is classified into the following three levels according to the observability andmateriality used to measure fair value.
Level 1:

Unadjusted quoted prices in active markets for identical assets and liabilities

Level 2:

Inputs other than Level 1 inputs that are observable directly or indirectly

Level 3:Significant inputs are unobservable

If significant multiple inputs are used to fair value measurement, the fair value measurement is categorized in its
entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial instruments measured at fair value
Fair value (millions of yen)Classification

Level 1

Level 3

Level 2

Total

Investments in securities
Other securities
Shares¥13,706——¥13,706

—

¥126

—

126

¥13,706¥126—¥13,832

Derivative transactions
Forward exchange contracts
Total assets(Note) A description of the valuation technique(s) and inputs used in the fair value measurements
Investments in securities
Fair values of shares are based on prices at listed security exchanges. As shares are traded in active markets,their inputs is classified as Level 1.
Derivative transactions
The fair value of forward exchange contracts is calculated based on quotations obtained from counterparty
financial institutions and is classified as Level 2.

19

(Notes on rented and other real estate)
Not disclosed due to immaterial.
(Notes on revenue recognition)
1. Disaggregation of revenue from contracts with customers
Reportable segment
Enterprise
Area(Millions of yen)
Other
Total
(Note)

Consumers
Professional
Total
IT solutions businessSI services¥0¥71,311¥12,207¥15,062¥98,581―¥98,581
Maintenance andoperations services /outsourcing
15
34,231
10,752533
45,533
4,163
49,696
Systems and IT
29,37337,681
47,113
9
114,178
1,137
115,315
products
Other businesses
105,303
56,975151,026
23,426
336,7317
336,739
Revenue from contracts
134,692
200,200
221,100
39,032595,0255,308
600,333
with customers
Other revenue
0
7,790
1,348
―
9,140
―
9,140
Total
¥134,692¥207,990¥222,449¥39,032¥604,165¥5,308¥609,473(Note) The “Other” segment is a business segment that is not included in the reportable segments and includes shared service
businesses.
2. Useful information in understanding revenue
Useful information in understanding revenue is as presented in “(Notes on important items forming the basis of consolidated
financial statements), 4. Accounting policies, (5) Standards for recording key revenue and expenses.”
3. Information for understanding revenue for the current and subsequent fiscal years(1) Contract asset and contract liability balances
Amount (millions of yen)
Receivables from contracts with customers (beginning balance)¥97,272
Receivables from contracts with customers (ending balance)
98,899Contract assets (beginning balance)
11,940Contract assets (ending balance)
11,493Contract liabilities (beginning balance)
17,639Contract liabilities (ending balance)¥19,278(Note) Contract assets primarily relate to the right of the Group to consideration for goods or services provided, mainly in thecustom development of software, for which performance obligations have been satisfied in part or in full, but an invoice
has not yet been issued as of the last day of the fiscal year.
Once the Group has an unconditional right to consideration, it reclassifies contract assets to receivables from contracts
with customers.
Contract liabilities primarily relate to advances received from customers as payment for products or payment forunfulfilled services in the case of services that are continuously provided.
Contract liabilities are reversed upon recognition of revenue.
The amount of revenue recognized for this fiscal year that was included in contract liabilities at beginning of this fiscal
year was 8,864 million yen.
The amount of revenue recognized from performance obligations satisfied(or partially satisfied) in previous fiscal
years was immaterial.

20

(2) Transaction price allocated to the remaining performance obligations
The Group has applied the practical expedient to the notes on transaction prices allocated to the remaining performanceobligations, and does not disclose contracts with an original expected duration of one year or less.
The revenue expected to be recognized in the future fiscal years related to performance obligations that are
unsatisfied as of this fiscal end was as follows.
Amount (millions of yen)
Within 1year¥9,369Between 1 year and 2 years
3,332
Between 2 year and 3 years
1,891
Between 3 and 4 years
1,171
Between 4 and 5 years
426
Over 5years
51
Total¥16,242(Note) Of the contracts which are mainly business equipment maintenance contracts, those for which revenue is recognizedbased on an amount multiplied by a unit price stipulated in the contract according to usage are not disclosed.
(Notes on information per share)
1. Net assets per share
2. Net income attributable to owners of parent per share

3,352.30 yen
281.41 yen(Notes on significant subsequent events)(Establishment of a subsidiary)
The Company decided to set up a corporate venture capital (hereinafter “CVC”) fund at a meeting of the Board of Directors heldin January 29, 2024. The CVC fund is a consolidated subsidiary of the Company.
1. The purpose of establishing a subsidiary
On January 2024, the Company launched the R&B (Research & Business Development) Promotion Center, a professionalorganization with an R&B function that works to create new businesses in order to solve social issues in a future-oriented
manner. The center will work on creating new value by promoting open innovation worldwide together with like-minded startup companies, educational institutions, and administrative bodies.
As an R&B initiative, the Company set up the CVC fund “Canon Marketing Japan MIRAI Fund” to speed up open
innovation with start-up companies with cutting-edge technology and business ideas.
The investment areas are based on social issues envisioned for the future without being limited to the existing businesses of
the Canon Marketing Japan Group. There are two investment areas: Well-being and Business Transformation.
2. Profile of the CVC fund(1) Name(Registered name)(2) Grounds, etc. forestablishment(3) Purpose of establishment(4) Establishment date(5) Total value of funds(6) Investment period(7) Management company(8) Investors(9) Ownership

Canon Marketing Japan MIRAI Fund
(Canon Marketing Japan Future Investment Limited Liability Partnership)
Limited Partnership Act for Investment
Investment for start-up companies, etc.
January 29, 2024
10,000 million yen (plan)
10 years (plan)
Global Brain Corporation
Canon Marketing Japan Inc. (limited liability partner)
Global Brain Corporation (unlimited liability partner)
Canon Marketing Japan Inc. (99.5%)
Global Brain Corporation (0.5%)

21

<Profile of Global Brain Corporation>
Date of establishment
January 14, 1998
Address
10-11 Sakuragaoka-cho, Shibuya-ku, Tokyo
Representative
Yasuhiko Yurimoto (President and CEO)Business
Venture capital business(Notes on business combination, etc.)
Business combination as a result of acquisition(1) Outline of business combination(i) Name of the acquired company and its business
Name of the acquired company: TCS Inc. (former TOKYO NISSAN COMPUTER SYSTEM CO., LTD.)
Business: Information system-related business(ii) Main reason for business combination
The Company considers that making TCS Inc. a wholly owned subsidiary will contribute to “(1) Expand ITS business withprofit,” a basic policy of the Medium-Term Management Plan (2022-2025), accelerate the implementation of IT solutions
strategies for different customer groups, and allow the Company to expand stock business by the service-type businessmodel where services are continuously provided for customers. In addition, the Company considers it possible to increase
the corporate value of TCS Inc. by promoting coordination with a wide range of businesses of the Company's group, and by
further strengthening the relationship with the existing customers of TCS Inc., and thereby has decided to make TCS Inc. awholly owned subsidiary.
(iii) Date of business combination
October 2, 2023 (Deemed acquisition date: October 1, 2023)(iv) Legal form of business combination
Acquisition of shares for cash(v) Name of acquiree after business combination
TCS Inc.
(vi) Ratio of voting rights acquired
Ratio of voting rights acquired as of October 2, 2023 through a tender offer
93.10%
Ratio of voting rights acquired as of November 1, 2023 through a demand for the sale of shares
6.90%
Ratio of voting rights after acquisition
100.00%(vii) Main reason for determining an acquirer
The Company acquired shares for cash and thus was determined to be the acquirer.
(2) Business performance period of the acquiree included in the consolidated financial statements
October 1, 2023 to December 31, 2023
(3) Acquisition cost of the acquiree and type of consideration
Consideration for acquisitionCash
11,009 million yen
Acquisition cost
11,009 million yen(4) Major cost related to acquisition and its amount
Remuneration, etc. for advisory services: 245 million yen(5) The amount of goodwill recorded, the reason for generation, and the amortization method and period(i) Amount of goodwill recorded
4,579 million yen(ii) Reason for goodwill
It was generated by excess earnings power expected in the future due to future business expansion.
(iii) Amortization method and period
Straight-line method over 12 years

22(6) The amounts of assets recorded and liabilities assumed on the date of business combination and their major components
Current assets
4,476 million yen
Non-current assets
4,547 million yen
Total assets
9,024 million yen
Current liabilities
1,155 million yen
Non-current liabilities
1,438 million yen
Total liabilities
2,594 million yen(7) Amount allocated to intangible fixed assets other than goodwill, a breakdown by type, and the weighted averageamortization period
Type
AmountWeighted average amortization period
Customer-related intangible assets
3,712 million yen
14.9 years

23

NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-Consolidated Balance Sheets(Amounts less than one million yen are truncated)◼ Assets
Current assets
Cash and deposits
Notes receivable-trade
Electronically recordedmonetary claims - operating
Accounts receivable-trade
Contract assets
Securities
Merchandise and finishedgoods
Raw materials and supplies
Advance payment - trade
Prepaid expenses
Short-term loans receivable
Accounts receivable - other
Forward exchange contracts
Other current assets
Allowance for doubtfulreceivables
Non-current assets
Property, plant andequipment
Buildings, net
Structures, net
Machinery, net
Furniture and fixtures, net
Rental assets, net
Land
Lease assets, net
Intangible assets
SoftwareFacility utilization rights
Other intangible assets
Investments and otherassetsInvestments in securities
Shares of subsidiaries andassociates
Claims provable inbankruptcy, claims
provable inrehabilitation and other
Long-term prepaid expenses
Deferred tax assets
Lease deposits
Other investments and otherassetsAllowance for doubtfulreceivables
Total assets

As ofDec. 31,
2023

As of
Dec. 31,2022¥355,314
62,847773
9,204
67,1644,618
1,500¥374,296
66,095887
9,540
69,3125,681
500

32,09333,240

299
1,380
1,019
171,300
2,719
126
305
(38)
149,405

341
1,389
881
181,202
4,954
309
(40)
137,768

46,462

46,16011,765
441
68
1,104
4,879
27,899
0
5,079
4,968
110
0

11,369
432
60
1,120
5,581
27,899
4,908
4,797
110
1

◼ Liabilities
Current liabilities
Electronically recorded
obligations - operating
Accounts payable-trade
Short-term loans payable
Lease obligations
Accounts payable - otherAccrued expenses
Accrued Income taxes
Consumption taxes payable
Contract liabilities
Advances received
Deposits received
Forward exchange contracts
Accrued bonuses
Accrued directors’ bonuses
Accrued product warranties
Accrued loss on contracts
Long-term liabilities
Provision for retirement
benefits
Allowance for long-term
continuous service
rewards
Other long-term liabilities

As ofDec. 31,
2023

As of
Dec. 31,2022¥116,826
213
38,83539,8003,136
12,416
4,031
3,198
10,451
1
3,118
1,311
48
262
18,17915,128¥124,828
1,293
42,30942,70002,215
12,391
6,094
2,753
10,212
1
3,178
21
1,371
46
232
5
37,97534,930

366

374

2,684
135,005

2,670
162,803364,937
73,303
85,21685,19817
208,5142,853
205,66131
81,700123,930(2,096)
4,718

345,247
73,303
85,211
85,19812
188,830
2,853
185,976
81,700104,276(2,096)
3,984

4,631

3,999
(14)
29
349,261¥512,064

11,44586,52810,44070,91359,797

118

125

2,532
10,995
1,061

1,954
12,047
1,154

1,116

1,164

Total liabilities◼ Equity
Shareholders’ equity
Common stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for specificpurposeGeneral reserve
Retained earnings brought
forwardTreasury stock
Valuation and translation
adjustments
Net unrealized gains onavailable-for-sale securities
Deferred gains or losses onhedgesStock acquisition rights

(149)

(153)

Total equity

87
58
369,714¥504,720¥512,064

Total liabilities and equity¥504,720

98,03424

Non-Consolidated Statements of Income(Amounts less than one million yen are truncated)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Foreign exchange gains
Other, net
Non-operating expenses
Interest expenses
Share related expenses
Loss on investments in partnership
Foreign exchange losses
Other, net
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investments in securities
Other, net
Extraordinary losses
Loss on sales and disposal of fixed assets
Loss on sales of investments in securities
Other, net
Net income before income taxes
Income taxes-current
Income taxes-deferred
Net income

From January 1, 2023
to December 31, 2023
¥428,556
299,436
129,120
99,662
29,457
13,119364
12,185
456
113
197
41
56
31
16
51
42,379
115
1
113
472
466
2
3
42,022
8,648
721¥32,652

25

From January 1, 2022
to December 31, 2022
¥435,150
304,721130,428
99,50430,923
12,532
293
11,656
447
10
124
194
42
56
29
65
43,262
299
0
298
0
102
82
18
1
43,4598,395
1,295¥33,769

Non-Consolidated Statements of Shareholders’ Equity
From January 1, 2023 to December 31, 2023
(Amounts less than one million yen are truncated)
Shareholders’ equity
Retainedearnings

Capital surplus
Common stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings¥73,303¥85,198¥12¥85,211¥2,853

-

-

-

-

-

-

-

-

-

-

Purchase of treasury stock

-

-

-

-

-

Disposition of treasury stock

-

-

4

4

-

Provision of reserve for specific purpose

-

-

-

-

-

Net changes in items other than shareholders’ equity

-

-

-

-

-

-

-

4

4

-

¥73,303¥85,198¥17¥85,216¥2,853

Treasury stock

Total
shareholders’equityBalance at beginning of the year
Changes during the year
Cash dividends
Net income attributable to owners of the parent

Total changes during the year
Balance at end of the year

Shareholders’ equity
Retained earnings
Other retained earnings
Reservefor
specific
purposeBalance at beginning of the year

Generalreserve Retained
earnings
brought
forward

Total otherretainedearnings- ¥81,700¥104,276¥188,830¥ (2,096)¥345,247--(12,967)(12,967)-(12,967)

Changes during the year
Cash dividends
Net income attributable to owners of the parent--

32,65232,652-32,652

Purchase of treasury stock

-

-

-

-

(4)

(4)

Disposition of treasury stock

-

-

-

-

4

9

Provision of reserve for specific purpose

31

-

(31)

-

-

-

Net changes in items other than shareholders’ equity

-

-

-

-

-

-

Total changes during the year31-

19,653

19,6840

19,689Balance at end of the year

¥31 ¥81,700¥123,930¥208,514¥ (2,096)¥364,937

26

Valuation and translation adjustments
Unrealized gain Deferred gain
(loss) on(loss) on
available-forsale derivatives
securities
under hedge
accounting
Balance at beginning of the year

Foreigncurrencytranslation
adjustment

StockacquisitionrightsTotal equity¥29¥349,261¥3,999¥ (14)¥3,984

Cash dividends

-

-

-

-

(12,967)

Net income

-

-

-

-

32,652

Purchase of treasury stock

-

-

-

-

(4)

Disposition of treasury stock

-

-

-

-

9

Provision of reserve for specific purpose

-

-

-

-

-

632

101

733

29

763

632

101

733

29

20,452¥4,631¥87¥4,718¥58¥369,714

Changes during the year

Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the year

27

Notes to Non-Consolidated Financial Statements(Notes regarding key accounting policies)
1. Asset valuation standards and methods(1) Valuation standards and methods for securities
Held-to-maturity securities・・・・・・・・ Amortized cost (straight-line method)
Shares in subsidiaries and affiliates・・・・・ At cost based on moving average method
Other securities
Securities other than shares, etc. that
do not have a market price・・・・・・・ Fair value (valuation differences included in total net assets, costof products sold calculated based on moving-average method)
Shares, etc. that do not have amarket price・・・・・・・・・・・・ At cost based on moving-average method(2) Valuation standards and methods for inventory assets
Merchandise・・・・・・・・・・・・・・ At cost based on monthly moving-average method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)
Repair parts・・・・・・・・・・・・・・・ At cost based on monthly moving-average method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)
Supplies・・・・・・・・・・・・・・・・ Last-purchase price method(Carrying amounts on balance sheet calculated to include writedowns due to decreased profitability)
2. Method of depreciation for long-term assets(1) Property, plant and equipment(Excluding Lease assets, net)・・・・・・・

Based on declining-balance method
Rental assets are depreciated by the straight-line method.
Buildings acquired on or after April 1, 1998 (excluding furniture andfixtures), and related furniture, fixtures and structures acquired on
or after April 1, 2016, are depreciated by the straight-line method.
Useful lives are as follows:
Buildings and structures, net
3 years to 50 years
Furniture and fixtures, net

2 years to 20 years

Rental assets, net

3 years(2) Intangible assets(Excluding Lease assets, net)・・・・・・・

Based on straight-line method
Software for sale is amortized based on the larger of the amortization
amount based on expected sales volume or expected sales revenueor the equally allocated amount over the expected effective period(up to 3 years). In-house software is depreciated the straight-line
method based on the length of in-house durability (5 years).
(3) Lease assets, net・・・・・・・・・・・・・ Lease assets are depreciated by the straight-line method based on
their useful life, which is lease period, with zero residual value.

28

3. Standards for recording allowances(1) Allowance for doubtful receivables・・・・・・ To cover possible losses on collection, general accounts receivable
are calculated based on the actual rate of uncollected receivables,and doubtful account receivables based on individually estimateduncollectible amounts for specific items.
(2) Accrued bonuses・・・・・・・・・・・・・ The estimated payable for current year’s portion of employees’
bonus is recorded based on the next round payment.
(3) Accrued directors’ bonuses・・・・・・・・・ The estimated payable for current year’s portion of director’sbonus is recorded based on the next round payment.
(4) Accrued product warranties・・・・・・・・・ Costs arising from a one-year free warranty contract for consumer
products are recorded based on the actual cost of free repairs.
(5) Accrued loss on contracts・・・・・・・・
The estimated amount of losses from the following fiscal year
onwards is recorded for orders contracts as of the end of the current
fiscal year, in cases that are expected to result in a loss in the future(as of the end of the current fiscal year) and in which it is possible
to reasonably estimate the relevant losses, in order to cover future
losses on order contracts.
(6) Accrued pension and severance costs・・・・・ The estimated amount of benefit obligations and pension assets asof the end of the current fiscal year is recorded in order to cover
retirement benefits payable to employees.
Retirement benefit obligations are calculated based on standard
benefit calculation formula, to align the estimated amount of
retirement benefits with the relevant period as of the end of thecurrent fiscal year. Prior service costs are expensed using thestraight-line method based on a certain number of years within the
average remaining years of service for the relevant employee at thetime of incurring costs.
Actuarial differences are expensed from the following fiscal year,
using the straight-line method based on a certain number of years
within the average remaining years of service for the relevant
employee at the time of incurring costs.
(7) Allowance for long-term continuous service rewards・・・
The estimated amount payable is recorded in order to cover paymentof rewards to employees in accordance with internal regulations on
long-term continuous service.
4. Standards for recording revenue and expenses
The details of the main performance obligations in key businesses related to revenue from contracts with theCompany’s customers and the usual timing at which the Company typically satisfies these performance obligations(when it typically recognizes revenue) are as described below.
In addition to sale of Canon products and provision of related services, the Company sells products and provides
services in fields such as IT solutions and industrial equipment. In the case of sale of a product that does not require
inspection by the customer, usually at the time of delivery of the product, the legal title and physical possession of the
product and significant risks and economic value associated with the ownership of the product transfer to the customer,
and the Company is entitled to receive payment of consideration for the transaction from the customer. Therefore, theCompany judges that performance obligations are satisfied by transferring control of the product to the customer at thispoint of time, and recognizes revenue at the time of the delivery of product. Additionally, in the case of sale of a productthat requires inspection by the customer, at the time of completion of inspection by the customer, the legal title andphysical possession of the product and significant risks and economic value associated with the ownership of the
product transfer to the customer, and the Company is entitled to receive payment of consideration for the transaction
from the customer. Therefore, the Company judges that performance obligations are satisfied by transferring controlof the product to the customer at this point of time, and recognizes revenue at the time of completion of inspection by
the customer. Provision of services consists mainly of business equipment maintenance contracts, which are routine orrecurring, and therefore the Company judges that the performance obligations are satisfied over time as services areprovided to customers in accordance with the contracts and recognizes revenue equally over a given period based on
the terms and conditions of the contract with the customers. In the case of contracts where the Company is entitled to29

receive consideration from the customer for the portion of the performance obligation satisfied according to productusage, the Company judges that the customer enjoys benefits according to the usage, and recognizes revenue based on
an amount multiplied by a unit price stipulated in the contract according to the usage. Furthermore, consideration fortransactions is generally settled within a short period of time following the time when performance obligations are
satisfied, and the amount of consideration promised does not include a significant financing component. For some ofthe sale of products and the provision of services, the Company receives consideration for transaction in the form ofadvance payments.
Conditions peculiar to each reporting segment are as described below. The Enterprise segment and the Area segment
are combined due to the similarity of the products sold and services provided in these two segments.
(Consumers)
The transaction price received by the Company in exchange for products sold includes variable considerations suchas rebates based on the achievement of a specified milestone or other targets. Variable considerations such as rebates
are mainly related to products sold for which the main customer base is retailers. Variable considerations such as rebates
are deducted from the transaction price, and rebates are estimated using the expected value method based on actual
figures in previous years and other factors.
(Enterprise and Area)
For maintenance and operation services/outsourcing for IT solutions, services are provided to customers in a uniform
manner over the contract duration, and therefore the Company judges that the performance obligations are satisfied
over time and recognizes revenue equally over a given period based on the terms and conditions of the contract withthe customers. In the case of contracts where the Company is entitled to receive consideration from the customer forthe portion of the performance obligation satisfied according to factors such as hours, workload, etc., the Company
judges that customer enjoys benefits according to the hours and workload involved in the service and recognizes
revenue based on an amount multiplied by a unit price stipulated in the contract according to hours, workload, etc.
involved in the service.
For SI services that provide custom development of software, if reasonable estimates of progress can be made, sincedeliverables are transferred to the customer as progress is made on development, the Company recognizes revenue overthe development period in accordance with the progress of development. The Company judges that costs incurred areproportional to the progress of development and recognizes revenue using the input method based on costs incurred(cost-to-cost method) to estimate progress. Additionally, if reasonable estimates of progress cannot be made, in thecase that expenses involved in the amount of progress made are recoverable, the Company recognizes revenue basedon the cost recovery method.
5. Key hedge accounting methods(1) Hedge accounting method・・・・・・・・・・ Appropriation accounting is applied to foreign currency
denominated payables subject to forward exchange contracts in linewith accounting requirements.
(2) Hedging instrument and subject
Hedging instrument・・・・・・・・・・・・ Forward exchange contracts
Subject of hedging・・・・・・・・・・・・ Foreign currency denominated payables(3) Hedging policy・・・・・・・・・・・・・・ Measures are taken to hedge against the risk of cash flow
fluctuations due to exchange rate fluctuations in the future, in
relation to foreseeable foreign currency denominated payables up
to a certain amount.
(4) Method of evaluating effectiveness of hedging・・For forward exchange contracts, the same amount is appropriatedon the same date in the same currency, in accordance with theCompany’s hedging policy. The effectiveness is not evaluated on
the date of settlement of accounts because it is guaranteed tocorrelate with subsequent exchange rate fluctuations.
6. Other important items forming the basis of financial statements
Retirement benefit accounting・・・・・・・・ Different methods of accounting are used for unrecognizedactuarial differences and unrecognized prior service costs inrelation to retirement benefits, as opposed to accounting methods
used for consolidated financial statements.

30

(Notes on changes in accounting policies)(Application of revised Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the revised Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021; hereinafter “Implementation Guidance on Fair Value Measurement Standard”)
from the beginning of the current fiscal year, and will prospectively apply the new accounting policies stipulated by the
Implementation Guidance on Fair Value Measurement Standard in accordance with the transitional treatment provided
in Paragraph 27-2 of the Implementation Guidance on Fair Value Measurement Standard. There is no impact on thefinancial statements.

31

(Notes on accounting estimates)
Recoverability of deferred tax assets
1. Account and amount recorded for the current fiscal year
Account
Amount (millions of yen)
Deferred tax assets
2. Other information that contributes to the understanding of the details of accounting estimates
Information is omitted as the same information is provided in Notes to Consolidated Financial Statements.
(Notes on balance sheets)
1. Accumulated depreciation on property, plant and equipment
2. Guarantee liabilities
Guarantees for employees’ housing loans
3. Receivables from and payable from affiliates
Short-term monetary receivables
Short-term monetary payables
Long-term monetary receivables
Long-term monetary payables

179,066 million yen
65,206 million yen
22 million yen
399 million yen(Notes on statements of income)Transactions with affiliates
Net sales
Purchasing
Other business transactions
Non-business transactions

47,138 million yen
200,563 million yen
6,713 million yen
12,447 million yen(Notes on statements of shareholders’ equity)
Class and total of treasury stock owned as of end of current fiscal year

Common share

32

55,070 million yen
2 million yen

1,401,615 shares¥10,995

(Notes on tax allocation)
1. Breakdown of main causes of deferred tax assets and liabilities
Deferred tax assets
Accrued pension and severance costs
Additions to deemed dividends
Recording of estimated future variable consideration
Loss on impairment of investment in securities
Excess depreciation of long-lived assets
Accrued business tax and business office tax
Excess amortization of software

Accrued bonuses
Loss on disposal and devaluation of inventories
Asset retirement obligations

Allowance for long-term continuous service rewards
Accrued product warranties

Allowance for doubtful receivables
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets

10,373 million yen
1,192 million yen
748 million yen
480 million yen
474 million yen
458 million yen
438 million yen
433 million yen
417 million yen
338 million yen
113 million yen
81 million yen
47 million yen
591 million yen
16,189 million yen(1,780) million yen
14,409 million yen

Deferred tax liabilities
Unrealized gain (loss) on available-for-sale securities

Reserve for tax purpose reduction entry of non-current assets
Deferred gain (loss) on derivatives under hedge accounting

Other
Total deferred tax liabilities
Net deferred tax assets

2,080 million yen
1,279 million yen
39 million yen
13 million yen
3,413 million yen
10,995 million yen

2. Accounting for corporate and local income taxes or tax effect accounting related to these taxes
The Company applies the group tax sharing system from the fiscal year under review. In addition, the Company conducts
accounting and disclosure for corporate and local income taxes as well as tax effect accounting related to these taxes inaccordance with the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (PITF No.
42, August 12, 2021).

33

(Notes on transactions with related parties)
1. Parent company and major corporate shareholders, etc.
Category

Name ofcompany orindividual

Location

Capital orinvestment(millions ofyen)

Business
activities or
job title

Voting rights(or ownership)(%)

Relationshipwith concerned
party

Nature of transactions

Value oftransaction(millions ofyen)

Purchase of

ParentOhta-ku,Canon Inc.

company

174,761
Tokyo

Development

merchandise

and

(*1)

production for(Ownershipthe office,in theimagingCompany)systems andDirect: 58.5

industrial

Production of

HeadingYear-endbalance(millions ofyen)Accounts¥153,655

payable¥14,503

Sale ofBusinesstheconsumables for

Company’s

office equipment,

merchandiseetc.

Indirect: 0.0

Accounts¥6,136

receivable,¥1,800

other

(*2)

equipment

Recovery of

sectors, etc.

Non-business

funds

Short-term¥10,000

(*3)

loans

¥170,000

receivable

Of the above figures, “value of transaction” does not include consumption tax, etc. But balance of receivables andpayables include consumption tax, etc.
Terms of transactions and policy for determining terms, etc.
(*1) When purchasing merchandise, the Company sets out its preferred price, taking into account market prices, andthen enters into price negotiations to determine a final price.
(*2) When selling consumables for office equipment, the Company takes into account market prices and its cost,etc., and then enters into price negotiations to determine a final price.
(*3) When lending funds, a reasonable loan rate is determined by taking into account market rates.
There is no provision for security.
2. Subsidiaries, etc.
Category

Name ofcompany orindividual

Location

Capital orinvestment(millions ofyen)

Business
activities or
job title

Voting rights(or ownership)(%)

Relationshipwithconcerned
party

Nature of transactions

Value oftransaction(millionsof yen)HeadingYear-endbalance(millionsof yen)Softwaredevelopment

SI andcontract andconsulting, IT
Canon IT

service and(Ownership in

outsourcing ofdevelopment

the Company)

systemand sale of

Direct: 100.0

operation

Short-term

Minato-ku,
Subsidiary

Solutions
Tokyo

3,617

Inc.

variousConcurrent

software

Officers:

Non-business

Repayment of
funds
(*3)

¥500

Payment ofservice charges
for businessequipment, etc.
(*1)¥27,781loans¥7,900payable2

Consultation
Sale of theof a solution,

Company’s

Accounts
payable¥5,045sale, support
merchandise

Canon
System &Subsidiary
SupportInc.

and(Ownership inmaintenance

the Company)

service,

Direct: 100.0

Minato-ku,
TokyoBusiness

Accounts

and service
4,561

Sale ofconsumables foroffice equipment,
etc.
(*2)

agreement
Concurrent
mainly for
Officers:

receivable ¥33,262

trade, and¥3,074

contract
assetsCanon
2products
Non-business

Repayment of
funds
(*3)

Short-term¥2,000loans

26,400payableOf the above figures, “value of transaction” does not include consumption tax, etc. But balance of receivables andpayables include consumption tax, etc.
Terms of transactions and policy for determining terms, etc.
(*1) When making payment of service charges for office equipment, prices are determined through negotiation,
based on the price calculated by the Company.
(*2) When selling office equipment and its consumables, prices are determined through negotiation, based on theprice calculated by the Company.

34

(*3) When lending funds, a reasonable loan rate is determined by taking into account market rates.
There is no provision for security.
(Notes on revenue recognition)
Useful information in understanding revenue
Useful information in understanding revenue is as presented in “(Notes regarding key accounting policies), 4. Standards
for recording revenue and expenses.”(Notes on information per share)
1. Net assets per share
2. Net income per share

2,850.56 yen
251.80 yen(Notes on significant subsequent events)(Establishment of a subsidiary)
Descriptions are omitted because the same content is given in (Notes on significant subsequent events) in the Notes toConsolidated Financial Statements.

35

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

Report of Independent Auditors
February 7, 2024

The Board of Directors
Canon Marketing Japan Inc.

Deloitte Touche Tohmatsu LLC
Tokyo Office
Masahiro Ide
Shinji Hatano
Kumiko Shimizu

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

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying
consolidated financial statements, which comprise the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of shareholders’ equity and the notes to theconsolidated financial statements of Canon Marketing Japan Inc. (the “Company”) for the fiscal
year from January 1, 2023 through December 31, 2023.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and results of operations of Canon Marketing Japan Inc., which
consists of the Company and its consolidated subsidiaries, for the period covered by the
consolidated financial statements in conformity with accounting principles generally accepted inJapan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of
the Consolidated Financial Statements.” We are independent of the Company and its consolidated
subsidiaries in accordance with the provisions related to professional ethics in Japan, and are
fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficientand appropriate audit evidence to provide a basis for our audit opinion.
Other Information
Other information comprises the information included in the Business Report and theaccompanying supplemental schedules. Management is responsible for preparing and disclosing
the other information. Audit & Supervisory Board Members and the Audit & Supervisory Board
are responsible for overseeing the Directors’ execution of duties relating to the establishment andoperation of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we
do not intend to express any form of opinions thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for designingand operating such internal control as management determines is necessary to enable thepreparation and fair presentation of the consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
whether it is appropriate to prepare the consolidated financial statements in accordance with thepremise of a going concern, and for disclosing matters relating to going concern when it is required
to do so in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible formonitoring the execution of Directors’ duties related to designing and operating the financial
reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
express an opinion on the consolidated financial statements from an independent standpoint in an36

audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are
deemed material if they can be reasonably expected to, either individually or collectively,
influence the decisions of users taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards
generally accepted in Japan, and perform the following while maintaining professional skepticism.
・Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・In making those risk assessments, the auditor considers internal control relevant to the entity’s
audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control.
・Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
・Determine whether it is appropriate for management to prepare the consolidated financial
statements on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant
doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to theconsolidated financial statements in the audit report, or if the notes to the consolidated financial
statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on
the consolidated financial statements. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, anentity may be unable to continue as a going concern.
・Besides assessing whether the presentation of and notes to the consolidated financial statements arein accordance with accounting principles generally accepted in Japan, assess the presentation,
structure, and content of the consolidated financial statements including related notes, and whether
the consolidated financial statements fairly present the transactions and accounting events on which
they are based.
・Obtain sufficient and appropriate audit evidence regarding the financial information of theCompany and its consolidated subsidiaries in order to express an opinion on the consolidated
financial statements. The auditor is responsible for instructing, supervising, and implementing theaudit of the consolidated financial statements, and is solely responsible for the audit opinion.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board
regarding the scope and timing of implementation of the planned audit, material audit findings
including material weaknesses in internal control identified in the course of the audit, and othermatters required under the auditing standards.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board
regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any measures toeliminate obstacles or any safeguards that are in place to reduce obstacles to the acceptable level.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries
requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

37

AUDIT REPORT OF ACCOUNTING AUDITORON NON-CONSOLIDATED FINANCIAL STATEMENTS(TRANSLATION)

Report of Independent Auditors
February 7, 2024

The Board of Directors
Canon Marketing Japan Inc.

Deloitte Touche Tohmatsu LLC
Tokyo Office
Masahiro Ide
Shinji Hatano
Kumiko Shimizu

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

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited theaccompanying financial statements, which comprise the balance sheet, the statement of income, thestatement of shareholders’ equity and the related notes, and the accompanying supplementaryschedules of Canon Marketing Japan Inc. (the “Company”) for the 56th fiscal year from January 1,
2023 through December 31, 2023.
In our opinion, the financial statements and the accompanying supplementary schedules referred toabove present fairly, in all material respects, the financial position of the Company as of December
31, 2023, and the results of its operations for the year then ended in conformity with accounting
principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient andappropriate audit evidence to provide a basis for our audit opinion.
Other Information
Other information comprises the information included in the Business Report and the accompanying
supplemental schedules. Management is responsible for preparing and disclosing the otherinformation. Audit & Supervisory Board Members and the Audit & Supervisory Board are
responsible for overseeing the Directors’ execution of duties relating to the establishment andoperation of the reporting process for the other information.
Our opinion on the non-consolidated financial statements does not cover the other information and
we do not intend to express any form of opinions thereon.
In connection with our audit of the non-consolidated financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information is materiallyinconsistent with the non-consolidated financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Board Members and the
Audit & Supervisory Board for the Financial Statements and the Accompanying
Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements andthe accompanying supplementary schedules in accordance with accounting principles generally
accepted in Japan, and for designing and operating such internal control as management determines isnecessary to enable the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and theaccompanying supplementary schedules in accordance with the premise of a going concern, and fordisclosing matters relating to going concern when it is required to do so in accordance withaccounting principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible formonitoring the execution of Directors’ duties related to designing and operating the financial
reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the38accompanying supplementary schedules as a whole are free from material misstatement, whether due
to fraud or error, and to express an opinion on the financial statements and the accompanying
supplementary schedules from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can bereasonably expected to, either individually or collectively, influence the decisions of users taken on
the basis of the financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s
audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the financial statements and the accompanying supplementary schedules is
not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of
their application, as well as the reasonableness of accounting estimates made by management andthe adequacy of related notes.
・ Determine whether it is appropriate for management to prepare the financial statements and theaccompanying supplementary schedules on the premise of a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events orconditions that may cast significant doubt on the entity’s ability to continue as a going concern. If
there is a significant uncertainty concerning the premise of a going concern, the auditor is required
to call attention to the notes to the financial statements and the accompanying supplementaryschedules in the audit report, or if the notes to the financial statements and the accompanying
supplementary schedules pertaining to the significant uncertainty are inappropriate, issue amodified opinion on the financial statements and the accompanying supplementary schedules.
While the conclusions of the auditor are based on the audit evidence obtained up to the date of theaudit report, depending on future events or conditions, an entity may be unable to continue as agoing concern.
・ Besides assessing whether the presentation of and notes to the financial statements and theaccompanying supplementary schedules are in accordance with accounting principles generally
accepted in Japan, assess the presentation, structure, and content of the financial statements and theaccompanying supplementary schedules including related notes, and whether the financial
statements and the accompanying supplementary schedules fairly present the transactions andaccounting events on which they are based.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board
regarding the scope and timing of implementation of the planned audit, material audit findings
including material weaknesses in internal control identified in the course of the audit, and othermatters required under the auditing standards.
The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board
regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any measures toeliminate obstacles or any safeguards that are in place to reduce obstacles to the acceptable level.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under theprovisions of the Certified Public Accountants Act of Japan.

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