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

NOTICE OF CONVOCATION OF
THE 50TH ORDINARY GENERAL MEETING OF SHAREHOLDERSDATE AND TIME:

March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time)

PLACE:

Headquarters of Canon Marketing Japan Inc.
CANON HALL S, 3rd floor of CANON S TOWER
16-6, Konan 2-chome, Minato-ku, Tokyo
Item No. 1 - Dividends from Surplus
Item No. 2 - Election of Seven Directors
Item No. 3 - E lection of Two Audit & Supervisory
Board Members
Item No. 4 - Payment of Bonuses to Directors

Propositions:

Index
NOTICE OF CONVOCATION ……………………………………………… 3
REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS…… 7
BUSINESS REPORT………………………………………………………… 16
CONSOLIDATED FINANCIAL STATEMENTS………………………………… 31
NON-CONSOLIDATED FINANCIAL STATEMENTS…………………………… 33
AUDIT REPORTS…………………………………………………………… 35
REFERENCE………………………………………………………………… 38

Securities Code: 8060

To Our Shareholders
We would like to extend our sincerest gratitude to all of our shareholders for their continued support.
We express our sense of gratitude that Canon Marketing Japan reached 50th anniversary of our foundation, on
February 1, 2018.
We, Canon Marketing Japan Inc., are pleased to present our notice to convene the 50th Ordinary General Meetingof Shareholders.
Looking back at our Group performance over the fiscal
year in review (from January 1, 2017 to December 31,2017), despites a decline in interchangeable lens digital
camera and inkjet printer sales due to sluggish market
conditions, we achieved increased Net sales as a result of
brisk sales in IT solutions and industrial equipment. Progressin reforms to our earnings structure also resulted in highoperating income. At the 50th Ordinary General Meeting of
Shareholders, we will be proposing a year-end dividends of
35 yen per share. Full-year dividends will be 60 yen per share,
together with the interim dividends (25 yen per share), an
increase of 10 yen compared to our 49th fiscal year.
As of January 1, 2018, we transitioned to a new market andcustomer-centric organizational structure aimed at realizing
our Long-Term Management objectives Phase III. Throughthis new structure, we will make every effort to shift to
growth and enhance profitability with stronger ties withcustomers in each market and delivering greater value, andwe will go on as a true partner of customers for the next fifty
years.
We sincerely appreciate the continued support of our valued
shareholders.

March 2018

Haruo Murase

Masahiro Sakata

Chairman & Representative Director

President & Representative Director

Cover photo: Kazuyoshi Nomachi From the Canon Calendar 2018 "World Heritage Journey Sekaiisan wo Tazunete"

1

Canon Marketing Japan Inc.

Results Highlights(Figures are rounded to the nearest unit) Fiscal year

Net sales(Billions of yen)Comparison withprevious period

Operating income(Billions of yen)Comparison withprevious period

9.9%

0.5%

657.2

659.4

646.0

629.3

632.2

25.1

26.6

27.7

FY2015FY201630.4

17.0

FY2013

FY2014FY2015FY2016

Ordinary income

FY2017(Billions of yen)Comparison withprevious period

FY2013

FY2014

Profit attributable to owners of parent(Billions of yen)Comparison withprevious period

9.7%

26.6

28.0

28.7

13.9%

31.5

18.2

FY201316.0

15.7

FY2014FY2015

18.2

20.7

10.2

FY2014FY2015FY2016

Profit attributable to owners of parent per share

124

121

140

FY2017FY2013

FY2016FY2017

(Yen)

159

77

FY2013

FY2017

Please see our website for more detailed businessresults.
http://cweb.canon.jp/eng/ir/library/results.html

FY2014FY2015FY2016FY2017

Canon Marketing Japan Inc.

2

NOTICE OF CONVOCATIONTO OUR SHAREHOLDERS

Securities Code: 8060
March 5, 2018

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

Haruo Murase

Chairman & Representative Director

NOTICE OF CONVOCATION OF THE 50TH ORDINARY
GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 50th Ordinary General Meeting of Shareholders of Canon Marketing Japan Inc. (the“Company”) will be held as described below and that you are invited to attend the Meeting.
If you do not expect to attend the Meeting, you may exercise your voting rights in writing or by the Internet, etc. After
reviewing the following Reference Documents for General Meeting of Shareholders, please exercise your voting rights
by no later than 5:30 p.m. on March 27 (Tuesday), 2018 (Japan time).

1. DATE AND TIME:

March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time)

2. PLACE:				

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

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

1. Reports on the contents of the Business Report and Consolidated Financial Statements
for the 50th Fiscal Year (from January 1, 2017 to December 31, 2017), and reports on the
Auditing Results of Accounting Auditor and Audit & Supervisory Board regarding theConsolidated Financial Statements.

		

2. Reports on the content of the Non-Consolidated Financial Statements for the 50th Fiscal
Year (from January 1, 2017 to December 31, 2017).

Matters to be Resolved upon:
Propositions: Item No. 1 - Dividends from Surplus
		 Item No. 2 - Election of Seven Directors
		 Item No. 3 - Election of Two Audit & Supervisory Board Members
		 Item No. 4 - Payment of Bonuses to Directors

3

Canon Marketing Japan Inc.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

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

Consolidated Financial
Statements

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

Reference

Audit Reports

Financial Statements

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

Canon Marketing Japan Inc.

4

NOTICE OF CONVOCATION

Guidance Notes on the Exercise of Voting Rights
Your voting rights to be exercised at the General Meetings of Shareholders are important rights. After reviewing the following
Reference Documents for the General Meeting of Shareholders (pages 7-15), please exercise your voting rights.

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

Exercise of Voting
Rights by Attending
the Meeting

DATE AND TIME:

March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time)

PLACE:

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

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

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

The Voting Form must reach us no later than 5:30 p.m. on
March 27 (Tuesday), 2018 (Japan time)

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

Exercise of Voting
Rights by Electromagnetic Means(Via the Internet)of voting rights (https://soukai.mizuho-tb.co.jp/) and send it.
Deadline for exercising
voting rights:

The exercise of voting rights must be made no later than
5:30 p.m. on March 27 (Tuesday), 2018 (Japan time)

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

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

5

Canon Marketing Japan Inc.

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

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

Business Report(1) Access the website (https://soukai.mizuho-tb.co.jp/)(2) Enter the code for the exercise of voting rights and the password described on the enclosed Voting Form and click on
the “Log-in” button.
(3) Exercise your voting rights by following the directions on the screen no later than 5:30 p.m. on March 27 (Tuesday),2018 (Japan time).

3. Security

Consolidated Financial
Statements

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

4. Contact Information for Inquiries

Audit Reports

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

II. Platform for Electronic Exercise of Voting Rights

Reference

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

Canon Marketing Japan Inc.

6

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Item No. 1: Dividends from Surplus
We have comprehensively considered the business results, etc. for this Fiscal Year, and propose a year-end dividends as
described below.
Thus, the full-year dividends will be 60.00 yen per share, which includes interim dividends of 25.00 yen per share.
Although it is provided in the Articles of Incorporation that the dividends from surplus, etc. may be decided by aresolution of the board of directors, we have made it a matter to be resolved at this Meeting to have an opportunity tohear the shareholders’ views directly.

7

1

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

35.00 yen per common share of the Company
Total amount of dividend 4,538,396,065 yen

3Effective date of the dividend fromsurplus:

March 29, 2018

Canon Marketing Japan Inc.

Cash

Notice of Convocation

Item No. 2: Election of Seven Directors
The term of offices of all of the ten Directors will expire at the end of this Meeting. Accordingly, we would like to revise

Masahiro
SakataPresident & Representative Director and Executive President

Reappointment

2

YutakaUsui

Director & Senior Vice President
Director in charge of Group CSR, Group General Administration& Human Resources Management, Group Legal andIntellectual Property, Group Procurement, and Group Logistics

Reappointment

3

Yoshiyuki
Matsusaka

Director & Senior Vice President
Director in charge of Group Planning, Group Communications,and Deputy General Manager of Marketing Headquarters

Reappointment

4

Masachika
Adachi

Director & Senior Vice President
Director in charge of BPO Functional Unit and EnterpriseBusiness Unit

Reappointment

5

Shiro
HamadaDirector & Vice President
Director in charge of Group Accounting and Group Auditing

Reappointment

6

Akio
DobashiReappointment
OutsideOutside Director

Independent
Reference

7

YoshioOsawa

Business Report

1

Consolidated Financial
Statements

Present Position and Areas of Responsibility at the Company

Financial Statements

Name

Audit Reports

Candidate
No.

Reference Documents For General
Meeting of Shareholders

the structure of the Board of Directors due to the transition to a new organizational structure and elect seven Directors.
The candidates for the position of the Directors are as follows:

New Appointment–

OutsideIndependent
Canon Marketing Japan Inc.

8

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Candidate
No.

Name(Date of birth)(Number of the Company’s shares held)

Masahiro Sakata

1(Apr. 11, 1953)(27,200 shares)

Yutaka Usui

2

Brief personal record, position, business in charge
and important concurrent posts
As ofApr. 1977: Entered the Company
Mar. 2006: Director
Mar. 2009: Managing Director
Mar. 2011: Director & Senior Vice President
Mar. 2013: Director & Senior Vice President
Apr. 2013: Company President of Business Solution Company
Mar. 2015: 	President & Representative Director and Executive President (present)<Reason for Nomination as Director>
Mr. Sakata led the Business Solution business for many years. He has managed the Company as the
President & Representative Director, and has considerable experience, knowledge of management for theCompany and excellent expertise. Thus, he has again been selected as a candidate for a Director.

As ofApr. 1977: Entered Canon Inc.
Mar. 2007: Director
Mar. 2011: Senior Vice President
Mar. 2014: Director (present)
Apr. 2015:	Director in charge of CSR Headquarters and General Administration & Human
Resources Management Headquarters (present)
Mar. 2016: Senior Vice President (present)
Apr. 2016: 	Director in charge of Legal and Intellectual Property Headquarters,
Procurement Headquarters, and Logistics Center (present)
Jan. 2018: D irector in charge of Group CSR, Group General Administration & Human
Resources Management, Group Legal and Intellectual Property, Group
Procurement, Group Logistics (present)(Nov. 29, 1953)(17,400 shares)

9

Canon Marketing Japan Inc.

<Reason for Nomination as Director>
Mr. Usui led the Human Resources field for many years. He has overseen a number of different
management headquarters at head office, and has considerable experience and knowledge ofmanagement for the Company. Thus, he has again been selected as a candidate for a Director.

(14,457 shares)

Masachika Adachi

4(Mar. 30, 1960)(7,942 shares)

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

Business Report(Nov. 12, 1956)<Reason for Nomination as Director>
Mr. Matsusaka led Corporate Planning field and Public Relations field for many years. He has held the postsof Director and Executive Officer, and has considerable experience and knowledge of management for theCompany. Thus, he has again been selected as a candidate for a Director.

Consolidated Financial
Statements

3

As of
Apr. 1979: Entered the Company
Mar. 2013: Vice President
Mar. 2015: Director & Senior Vice President (present)
Apr. 2015: Director in charge of Communications Headquarters
Jul. 2016: Director in charge of Corporate Planning Headquarters
Jan. 2018: Director in charge of Group Planning and Corporate Planning Headquarters(present)
Feb. 2018: Director in charge of Group Communications (present)
Deputy General Manager of Marketing Headquarters (present)

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

Financial Statements

Yoshiyuki Matsusaka

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

Audit Reports

Name(Date of birth)(Number of the Company’s shares held)

Reference

Candidate
No.

Canon Marketing Japan Inc.

10

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Candidate
No.

Name(Date of birth)(Number of the Company’s shares held)

Shiro Hamada

5(Aug. 31, 1961)(6,252 shares)

Akio Dobashi

6(Jan. 2, 1949)(0 shares)

OutsideIndependent

11

Canon Marketing Japan Inc.

Brief personal record, position, business in charge
and important concurrent posts
As ofApr. 1984: Entered the Company
Apr. 2011: 	Deputy Chief Executive of Administrative Headquarters of Canon IT
Solutions Inc.
Jul. 2013: Group Executive of Accounting Headquarters (present)
Apr. 2015: Executive Officer
Mar. 2016: Director & Vice President (present)
Jan. 2018: D irector in charge of Group Accounting and Group Auditing (present)<Reason for Nomination as Director>
Mr. Hamada led the Finance and Accounting field for many years. He has held the posts of Director andExecutive Officer, and has considerable experience and knowledge of management for the Company.
Thus, he has again been selected as a candidate for a Director.

As ofApr. 1972: Entered Nichimen Company, Limited (presently Sojitz Corporation)
Apr. 2004: Representative Director, President & CEO of Sojitz Corporation
Jun. 2005: Representative Director, President & CEO of Sojitz Holdings Corporation
Oct. 2005: 	The corporate name was changed to Sojitz Corporation due to the merger ofSojitz Holdings Corporation and Sojitz Corporation
Representative Director, President & CEO of Sojitz Corporation
Apr. 2007: Representative Director and Chairman of Sojitz Corporation
Apr. 2012: Director of Sojitz Corporation
Jun. 2012: Senior Corporate Advisor of Sojitz Corporation
Jun. 2014: Corporate Advisor of Sojitz Corporation (present)
Jun. 2015: Outside Director of OSJB Holdings Corporation
Mar. 2016: Outside Director of the Company (present)
Jun. 2017: Outside Director of Maeda Corporation (present)<Important concurrent post>
Outside Director of OSJB Holdings Corporation<Reason for Nomination as Outside Director>
Mr. Dobashi has actively performed as a top executive at a general trading company for many years. He
has considerable experience and excellent expertise in company management. We assessed that he could
accomplish the duties as the Outside Director appropriately from such experience and excellent expertise.
Thus, he has again been selected as a candidate for an Outside Director. His term as an Outside Director
will be two years as of the close of this Meeting.

7(Jan. 22, 1952)(0 shares)

New Appointment
OutsideIndependent

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

Yoshio Osawa

Brief personal record, position, business in charge
and important concurrent posts
As ofApr. 1975: Entered Sumitomo Corporation
Jun. 2003: Concurrent post as director of Sumitomo Computer Service Corporation(presently SCSK Corporation)orporation
Apr. 2005: Executive Officer of Sumitomo Corporation
Apr. 2008: Managing Executive Officer of Sumitomo Corporation
Jun. 2008: Representative Director and Managing Executive Officer of Sumitomo
Corporation
Apr. 2011: Representative Director and Senior Managing Executive Officer of Sumitomo
Corporation
Apr. 2013: Representative Director, Assistant to President and CEO of Sumitomo
Corporation, Adviser of SCSK Corporation
Jun. 2013: Representative Director, President & COO of SCSK Corporation
Apr. 2015: President and Representative Director SCSK Corporation
Apr. 2016: Chairman of the Board of the Directors, SCSK Corporation
Apr. 2017: Outside Director of SCSK Corporation

Business Report

Name(Date of birth)(Number of the Company’s shares held)

Consolidated Financial
Statements

Candidate
No.

<Reason for Nomination as Outside Director>
Mr. Yoshi Osawa has actively performed as a top executive at a general trading company and IT services
company for many years. He has considerable experience and excellent expertise in company
management. On this basis, we assessed that he could accomplish the duties of outside director
appropriately. Thus, he has been newly selected as a candidate for an Outside Director.

Reference

Audit Reports

Financial Statements

Notes:
1. None of the candidates for the Directors have any special interest in the Company.
2. Should Mr. Akio Dobashi and Mr. Yoshio Osawa be elected, the Company will make both of them independent directors under the regulation of theTokyo Stock Exchange, Inc. They both meet the Company’s Independence Standards for Independent Directors/Audit & Supervisory Board Members(Please see page 14).
3. The Company has entered into a contract with Mr. Akio Dobashi limiting the amount of his damages compensation liability defined in Paragraph1,
Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should he be elected, the Company will continue theaforementioned contract with him. Should Yoshio Osawa be elected, the Company will also enter into a contract to limit liability with him under thesame terms.

Canon Marketing Japan Inc.

12

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS

Item No. 3: Election of Two Audit & Supervisory Board Members
The term of offices of Audit & Supervisory Board Members Mr. Fumio Ogaki and Mr. Shigeo Hasegawa will expire at the end of
this Meeting. We would like you to elect two Audit & Supervisory Board Members.
Further note that prior consent has been obtained from the Audit & Supervisory Board concerning the submission of this item.
The candidates for the Audit & Supervisory Board Members are as follows:
Candidate
No.

Name(Date of birth)(Number of the Company’s shares held)

Shinichi Inoue

1(Feb. 22, 1958)(9,200 shares)

New Appointment

Shigeo Hasegawa

Brief personal record, position and important concurrent posts
As ofApr. 1983: Entered Canon Inc.
Jan. 2003: 	Group Executive of Distribution Company
Mar. 2008: Director
Mar. 2011: 	Vice President
Mar. 2012: Director of Canon IT Solutions Inc. (present)
Mar. 2013: 	Senior Vice President (present)
Mar. 2014: Senior Vice President of Canon IT Solutions Inc. (present)<Reason for Nomination as Audit & Supervisory Board Members>
Mr. Shinichi Inoue has been involved with the management of Canon and its Group companies for many
years, and based on this experience and expertise, we assessed that he could accomplish the duties as an
Audit & Supervisory Board Member appropriately. Thus, he has been newly selected as a candidate for
Audit & Supervisory Board Member.

As ofJul. 1980: Registered as certified public accountant
Jan. 2006: 	Group Manager of Global Services Group at Deloitte Touche Tohmatsu(presently Deloitte Touche Tohmatsu LLC)
Jun. 2010: Leader of IFRS Center of Excellent at Deloitte Touche Tohmatsu LLC
Apr. 2012: 	Specially-appointed professor, Chuo Graduate School of International
Accounting, Chuo University (present)
Mar. 2014: Outside Audit & Supervisory Board Member (present)

2(Jan. 1, 1952)(2,000 shares)

OutsideIndependent

13

Canon Marketing Japan Inc.

<Reason for Nomination as Outside Audit & Supervisory Board Members>
Although Mr. Shigeo Hasegawa does not have experience in the direct management of companies, he
has extensive experience and expertise in company accounting as a certified public accountant, and on
this basis we assessed that he could accomplish the duties as an Outside Audit & Supervisory Board
Member appropriately. Thus, he has again been selected as a candidate for Outside Audit & Supervisory
Board Member. His term as Audit & Supervisory Board Member will be four years as of the close of thisMeeting.

Notice of Convocation
Reference Documents For General
Meeting of Shareholders

Notes:
1. None of the candidates for the Audit & Supervisory Board Members have any special interest in the Company.
2. Should Mr. Shigeo Hasegawa be elected, the Company will make him independent director under the regulation of the Tokyo Stock Exchange, Inc. He
meets the Company’s Independence Standards for Independent Directors/Audit & Supervisory Board Members (Please see page 14).
3. The Company has entered into a contract with Mr. Shigeo Hasegawa limiting the amount of his damages compensation liability defined in
Paragraph1, Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should he be elected, the Company willcontinue the aforementioned contract with him. Should Shinichi Inoue be elected, the Company will also enter into a contract to limit liability with
him under the same terms.

(Reference) “Independence Standards for Independent Directors/Audit & Supervisory Board Members” of Canon Marketing Japan Inc.

Business Report

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

Independence Standards for
Independent Directors/Audit & Supervisory Board Members

Consolidated Financial
Statements

Canon Marketing Japan Inc. deems that a person who satisfies the requirements for Outside Directors/Audit & Supervisory Board Membersprescribed by the Companies Act of Japan, and meets the independence criteria set by securities exchanges in Japan, and does not fall into
any of the items below, is an “Independent Director/Audit & Supervisory Board Member” (a person who is independent from the
management of Canon Marketing Japan Inc. and unlikely to have conflicts of interest with general shareholders).

Audit Reports

Financial Statements

1. A person/organization for which Canon Marketing Japan Group (Canon Marketing Japan Inc. and its subsidiaries; hereinafter the same) is amajor client, or a major client of Canon Marketing Japan Group, or an executing person of such organization or client
2. A large shareholder of Canon Marketing Japan Inc., or an executing person of such shareholder
3. A person/organization receiving large amounts of contributions from Canon Marketing Japan Group, or an executing person of suchorganization
4. A consultant, accounting professional or legal professional who has received a large amount of money or other properties from Canon
Marketing Japan Group, other than as compensation for being a Director/Audit & Supervisory Board Member (if the recipient is a
corporation, partnership or any other organization, this item applies to any person belonging to said organization.)
5. A certified public accountant belonging to the audit firm engaged to conduct the statutory audit of Canon Marketing Japan Group(including any such accountant to whom this item has applied in the last 3 fiscal years)
6. An executing person of another company in cases where an executing person of Canon Marketing Japan Inc. is an outside director/Audit
and Supervisory Board Member of such other company
7. An immediate family member (spouse and a relative within the second degree of kinship) of any of the persons listed in each of items 1 to6; provided, however that the persons to whom this is applicable shall be limited to key executing persons such as directors, executive
officers of companies and partners of advisory firms

Canon Marketing Japan Inc.

Reference(Notes)* In item 1, “major” means in cases where the total amount (for any fiscal year during the last 3 fiscal years) of transactions between Canon Marketing Japan
Group and such client exceeds 2% of the consolidated sales of Canon Marketing Japan Group or such client.
* In item 2, “a large shareholder” means a shareholder who directly or indirectly holds 5% or more of the total voting rights of Canon Marketing Japan Inc.
* In item 3, “a large amount” means in cases where the total amount of contributions exceeds ¥12 million (in cases where the recipient is an individual) or
1% of the annual gross income of such recipient (in cases where the recipient is an organization), for any fiscal year during the last 3 fiscal years of Canon
Marketing Japan Inc.
* In items 1 to 3 and 6, an “executing person” means an executive director, executive officer and employee including manager (in items 1 to 3, including aperson to whom this item has applied in any fiscal year during the last 3 fiscal years).
* In item 4, “a large amount” means in cases where the total amount of money or other properties received by said consultant, etc., exceeds ¥12 million (incases where the recipient is a person) or 1% of the annual gross sales of such consultant, etc. (in cases where the recipient is an organization).

14

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS

Item No. 4: Payment of Bonuses to Directors
It is proposed that bonuses will be paid to the eight Directors excluding the Outside Director as of the end of this fiscal
year, in appreciation of their services during this fiscal year, which totals ¥78,500,000 considering the results for this fiscal
year, etc.

15

Canon Marketing Japan Inc.

Notice of Convocation(Documents provided in accordance with Articles 437 and 444 of the Companies Act of Japan)

BUSINESS REPORT (January 1, 2017 to December 31, 2017)
1. Current Conditions of Canon Marketing Japan and its consolidated subsidiaries (the “Group”)

Reference Documents For General
Meeting of Shareholders(1) Business Progress and Achievement
productivity through improved operational efficiency andconsumer spending and capital investment has picked up,

cut overheads, enabling us to achieve operating income ofand the economy has made a mild recovery.

¥30,406 million (up 9.9%) and ordinary income of ¥31,491

Against this economic backdrop, although sales of

million (up 9.7%). Profit attributable to owners of parent cameinterchangeable lens digital cameras and inkjet printers haveto ¥20,679 million (up 13.9%).

fallen short of their performance in the previous year, as aStarting with this Year, changes have been made to theresult of strong performance in IT solutions and industrial

operational categories of our Group companies in connection

equipment, we recorded net sales of ¥632,189 million (upwith an internal Group reorganization. For this reason,

0.5% from the previous year).

comparisons and analyses of the Year will be made based on

In terms of income meanwhile, we maintained steadythe new categories.

Consolidated Financial
Statements

Looking back at the Japanese economy over this Year,Business Report General Business Conditions

figures for more profitable services and solutions, increased

Financial Statements

 Constitution of Sales by Operations
Industrial/Medical

5%
Net sales ¥34,308 million

Business Solutions

23%

51%

Net sales ¥152,339 million

Net sales ¥338,145 million

Audit Reports

Imaging Systems

Reference

IT Solutions

21%
Net sales ¥134,896 million

Canon Marketing Japan Inc.

16

BUSINESS REPORT Business Conditions by Operation

Business Solutions

Net sales
Operating income¥338,145 million¥12,238 million

Business Solutions

In the domestic market for coreproducts in the business solutions
segment, shipments of officemultifunctional printers (MFPs) were
down compared with the previous
year due to a general slump indemand across the market. Demand
imageRUNNER ADVANCE
was also sluggish for laser printers
C3530F
among the private and public
sectors, with shipments similarly down from the previous year.
As for the Group, we have made efforts to acquire newcustomers with the release of the imageRUNNER ADVANCE
C3500 series as our flagship line of color office MFPs for small
and medium-sized companies. In addition, we received large
orders from major companies, bringing sales higher than theprevious year.
In the production printing business, we sell production MFPs,
continuous feed printers, large-format inkjet printers andother such products aimed at markets including commercial
printing, in-house printing and critical record printing, as well
as offering services and support. This year, cut sheet printerssuch as the imagePRESS C850/C650 maintained healthy sales

imagePRESS C850

17

Canon Marketing Japan Inc.

among regular offices and the printing industry, but due
to a delay in shipments of our new continuous feed printerproduct, sales slipped below from the previous year.
For laser printers, although there has been a continuing
decline in shipments due to consolidation into MFPs atregular offices, sales were up over the previous year due
to multiple large orders and expanded sales to specificindustries, which has been an area of focus. Sales of tonercartridges also rose over the previous year due to specified
industries printing large volumes and expanded shipments tocustomers in the financial and public sectors.
In the network camera business, we sell devices for a wide
variety of purposes, including security and marketing, as wellas providing services and support. This year, we undertook
major projects for commercial facilities and combined
products from Axis Communications AB and Milestone
Systems A/S to secure orders across a wide range of fields andsurpass sales of the previous year.
While print volumes rose steadily in part due to an increasein the number of devices in operation in the market,
maintenance service fees continue to fall, resulting in slightly
lower sales compared with the previous year in the areaof maintenance services for office MFPs and other suchproducts.
As a result, net sales in this segment totaled ¥338,145 million(up 1.1% from the previous year), with operating income
coming in at ¥12,238 million (up 1.5%).

IT Solutions

Notice of Convocation

Net sales¥134,896 million

Operating income¥4,559 million

Reference Documents For General
Meeting of Shareholders

 Business Conditions by Operation

The domestic IT solution market performed strongly overall<Embedded Systems Business>this year, with improving economic conditions driving

In terms of our embedded systems business, we develop

expanded IT investment in the financial and manufacturingsoftware that is designed to be embedded in products. In this

sectors, affecting small, medium and large-sized companies.

year the embedded business produced strong performancescratch or use solution packages to suit customers’ individualfrom the previous year due to fewer projects for principal
customers in the manufacturing sector.

needs. Net sales were up from the previous year due to a hike

<Products Business>in orders from the financial sector and academic institutions.

In terms of our product business,<IT Infrastructure and Services Business>
In terms of our IT infrastructure and services business, we
provide data center services, cloud-related services, system
platform construction services, and system operating services.
Net sales climbed above the previous year thanks to strong
performance from our data center services.

Consolidated Financial
Statements

In terms of our SI services business, we develop systems fromin applications for the automotive industry, but sales fell

we sell IT-related hardware, package
software and licenses. Sales were up
over the previous year on the backof brisk performance with security-

Financial Statements<SI Services Business>

Business Report

IT Solutions

related products such as ESET as wellas IT products.

“ESET” security software

As a result, net sales in this segment totaled ¥134,896 million
Audit Reports(up 4.7% from the previous year), with operating income
coming in at ¥4,559 million (up 14.5%).
Net sales for this segment include ¥27,528 million from

Reference

internal sales or transfers between segments.

Nishi-Tokyo Data Center

Canon Marketing Japan Inc.

18

BUSINESS REPORT Business Conditions by Operation

Net sales

Imaging Systems¥152,339 million

Operating income¥11,688 million

Imaging Systems<Digital Cameras>

Shipments of compact digital cameras on the domestic

In the domestic market for interchangeable lens digitalmarket rose from the previous year as production reboundedcameras, while mirrorless cameras sold well, demand wasfrom the supply shortages stemming from to the Kumamoto

sluggish for SLR cameras, and shipments of interchangeable

Earthquake in 2016. In addition to this rebound, high-priced

lens digital cameras was down from the previous year.

models also performed strongly, with sales surpassing those

We released the EOS M100 as the entry-level mirrorlessof the previous year.

camera in October last year and actively targeted promotions
at younger demographics. As a result, mirrorless camera sales
far surpassed the previous year.

<Inkjet Printers>
A sluggish market for inkjet printers placed downward
pressure on shipments, and sales were down from theprevious year as a result. Sales of inkjet cartridges were downon the previous year, due to a decline in printing volumes andother factors.
<Commercial Imaging Equipment>
Net sales were down from the previous fiscal year as a resultof sluggish shipments of broadcast lenses, due in part to a

EOS M100

decline in orders from broadcasters.

On the other hand, while salesof mid-range SLR cameras
were up from the previous

As a result, net sales for this segment totaled ¥152,339 million

year, mainly due to the EOS(down 4.3% on the previous year), with operating income

6D Mark II released in August,coming in at ¥11,688 million (up 7.4%).

sales of entry-level models
decreased, in part due to theEOS 6D Mark II

ongoing shift to mirrorlesscameras, with total sales for interchangeable lens digital
cameras falling short of the previous year.

19

Canon Marketing Japan Inc.

Notice of Convocation

Industrial/Medical

Net sales¥34,308 million

Operating income¥1,543 million

Reference Documents For General
Meeting of Shareholders

 Business Conditions by Operation<Industrial>
For industrial equipment, the ongoing boom in<Medical>In the medical segment, we made progress in strengthening

semiconductor-related markets resulting in considerable

the medical solutions business and promoting reforms to thesales growth over the previous year for semiconductorbusiness structure, but sales were down from the previous

manufacturing equipment, inspection and measurement

year due to weaker sales of X-ray film and pharmaceuticalequipment, maintenance services and so on. Businesses

dispensing products.

Business ReportIndustrial/Medical

outside semiconductor-related markets also performed
As a result, net sales for this segment totaled ¥34,308 million

Consolidated Financial
Statements

strongly, with sales up on the previous year.

(up 6.5% on the previous year), with operating income

Financial Statements

coming in at ¥1,543 million (up 731.3%).

Semiconductor manufacturing equipment(2) Capital Expenditures

Reference

Audit Reports

The capital expenditures by the Group during this fiscal year totaled ¥12,284 million, which are mainly as rented assets, tools,
fixtures and fittings, and ancillary facilities at our Nishi-Tokyo Data Center.

Canon Marketing Japan Inc.

20

BUSINESS REPORT(3) Issues to be Addressed
We expect the Japanese economy to continue its mild recovery as consumer spending and capital investment improve.
However, we also expect that future prospects will continue to be unclear due to uncertainty in overseas economies, the impact
of fluctuations in in financial and capital markets, and other factors. Against this economic backdrop, our top priority as theGroup is to build on our various strengths, including our strong customer base, our range of highly competitive Canon products,
and our IT capabilities, to expand our business domain even further. To achieve that, we have made it our Group Mission
under our Long-Term Management Objectives Phase III (2016 to 2020) to “help resolve social issues with advanced imaging& IT solutions,” and are committed to expanding our business based on our Group Vision; “the Canon Marketing Japan Group
understands it’s custormers and grows with its customers.”
In addition, to achieve the basic policies of our Long-Term Management Objectives Phase III, starting January 1, 2018, wetransitioned to a new organizational structure from the existing one based on products and sales channels to one based onmarkets and customers. Specifically, the new structure comprises four business units: the Consumers Business Unit targeting
individual consumers, the Enterprise Business Unit which handles large enterprises as its main customers, the Area Business Unit
which will cover small and mid-sized firms around Japan, and the Professional Business Unit, which handles customers in thespecialized fields through the Production Printing, Industrial Equipment, Healthcare and Video Solutions sub-segments.

Customer
Individuals

Business Unit

Consumers

Functional Unit
Supervisory Division

21

Canon Marketing Japan Inc.

Business / OfficeSpecialist Fields

Area(Small-toMedium-Sized
Customers)

Enterprise(Large Customers)

Professional
Production Printing
Industrial Equipment
Healthcare
Imaging Solutions

IT Platform
BPO

BPO

Call Centers / Services
Marketing Supervision
Service & Support SupervisionNotice of Convocation
Reference Documents For General
Meeting of Shareholders

Through this new structure, we will make every effort to shift to growth and enhance profitability with stronger ties withcustomers in each market and providing greater value.
<Shift to Growth>(1) Accelerate the speed of growth by shifting Group resources to businesses with high growth potential(2) Expand operations and supplement functions by making active use of M&A and alliances(3) Create and expand new businesses by investing in startups and running business creation programs

Consolidated Financial
Statements

Business Report<Enhanced Profitability>(1) Reduce SG&A expenses through fundamental structural reforms (thorough revisions of business processes,
consolidation and elimination of call centers, Group optimization of after sales services and personnel restructuring,etc.)(2) Raising productivity in existing businesses (improving market share of mirrorless cameras, improving the percentage of
genuine ink cartridges, achieving leading market share in MFPs shipments, maintaining unit prices of maintenance fees,
raising laser printer maintenance subscriptions, etc.)
We will endeavor to expand our operations and enhance business performance by promoting these priority strategies.

 Three-Year Management Plan Consolidated Financial Targets
Ordinary income

800
632.2

50

Three-Year Management Plan target

Changes
+2.0%

645.0

Changes+5.9%

Changes
+5.4%

720.0

680.0

40

(Billion yen)

ActualProfit margin
4.8%

30.4

Three-Year Management Plan target Profit margin

Profit margin
5.0%

32.0

Profit margin
5.1%

35.0

5.3%

38.0

50

600

30

400

20

20

200

10

10

0

2017

2018

2019

2020

Profit attributable to owners of parent

2018

2019

2020

(Yen)

ActualProfit margin
3.3%

20.7

250

Three-Year Management Plan target

32
24

2017

30

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

40

0Profit margin
3.4%

21.7

Profit margin
3.5%

24.2

Profit margin
3.6%

150

0

159

10

Three-Year Management Plan target

167

187

203

8

4

8

50

2

2018

2019

2020

0

31.5

33.0

2017

2018

Profit margin
5.1%

39.0

2019

2020

36.0

5.4%

2017

ActualThree-Year Management Plan target

7.2

7.1

2017

2018

7.7

7.9

2019

2020

6

100

2017

Profit margin
5.1%

ROE*

16

0

Profit margin
5.0%

(%)
Actual200

26.1

Three-Year Management Plan target Profit margin

Actual40

Financial Statements(Billion yen)

ActualAudit Reports(Billion yen)

1,000

(totals rounded to the nearest unit)

Operating income

2018

2019

2020

0

Reference

Net sales* ROE: Return on Equity, used as in indicator of how much a company makes as a result of money invested by its shareholders
Canon Marketing Japan Inc.

22

BUSINESS REPORT(4) Status of Assets and Earnings
 Consolidated

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

46th Fiscal Year

47th Fiscal Year

48th Fiscal Year

49th Fiscal Year

50th Fiscal Year

(Jan. 1, 2013 toDec. 31, 2013)(Jan. 1, 2014 toDec. 31, 2014)(Jan.1, 2015 toDec.31, 2015)(Jan. 1, 2016 to
Dec. 31, 2016)(Jan. 1, 2017 to
Dec. 31, 2017)657,215

659,432

646,002629,313632,189

17,01225,087

26,647

27,67630,406

18,21026,55328,04028,71731,491

10,167

16,03015,67018,161

20,67976.67

123.62120.84140.06

159.48467,076

479,747

486,502497,727

510,832

257,075

270,352

277,438

280,919

297,522

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

(5) Main Business
Segment

23

Major Products / Services

Business Solutions

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

IT Solutions

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

Imaging Systems

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

Industrial/Medical

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

Canon Marketing Japan Inc.

Notice of Convocation(6) Main Location of Operations
 The Company
Tokyo

Canon System & Support Inc.

Makuhari Office

Chiba

Canon Production Printing Systems Inc.

Sapporo Branch

Hokkaido

Canon IT Solutions Inc.

Sendai Branch

Miyagi

Nagoya Branch

Aichi

Osaka Branch

Osaka

Hiroshima Branch

Hiroshima

Fukuoka Branch

FukuokaTokyo

Canon Lifecare Solutions Inc.

Business Report

Konan Office

Consolidated Financial
Statements

Headquarters

Reference Documents For General
Meeting of Shareholders

 Principal Subsidiaries(7) Employees
Change from the end of the previous year

17,647 persons

Decrease of 240 persons from the previous year

Number of Employees

Change from the end of the previous year

Business Solutions

9,709 persons

Increase of 72 persons from the previous year

IT Solutions

4,552 persons

Decrease of 681 persons from the previous year

Imaging Systems

1,276 persons

Decrease of 214 persons from the previous year

Industrial/Medical

717 persons

Increase of 138 persons from the previous year

Other

1,393 persons

Increase of 445 persons from the previous year

Reference

Segment

Audit Reports

Number of Employees

Financial Statements

 Consolidated

Canon Marketing Japan Inc.

24

BUSINESS REPORT(8) Parent Company and Principal Subsidiaries
 Parent Company
ParentLocation
Company Name
Canon Inc.

Ohta-ku
Tokyo

Number of Voting Rights

Activities(Ratio of Voting Rights)

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

757,086(58.5%)

Relation with the Company
The Company is comprehensively conducting to sales,
services and marketing of the products manufacturedby the Parent Company in the Japan market.

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

 Principal Subsidiaries
Company Name

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

BusinessCanon System & Support Inc.

4,561

100.0

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

Canon Production Printing
Systems Inc.

2,744

100.0

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

Canon IT Solutions Inc.

3,617

100.0

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

Canon Lifecare Solutions Inc.

2,533

100.0

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

 Consolidated Status
1. The number of consolidated subsidiaries was 23.
2. Canon IT Solutions Inc. and Canon Software Inc., both the subsidiaries of the Company were merged into Canon IT Solutions Inc. on July
1, 2017.

25

Canon Marketing Japan Inc.

Notice of Convocation

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

Reference Documents For General
Meeting of Shareholders

299,500,000 shares(2) Total Number of Issued Shares, Capital Stock, Number of Shareholders
Total number of issued shares (shares)
Capital stock (yen)Change during This YearAs of the end of This Year

151,079,972-

151,079,972

73,303,082,757-

73,303,082,757

13,170Decrease of 1,982

11,188

Number of shareholders (persons)Business Report

As of the end of the Previous Year

Shareholding Ratio(thousands of shares)(%)

Canon Inc.

75,70858.4

Canon Marketing Japan Group Employee Stock Ownership Association

5,764

4.4

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

2,823

2.2

Japan Trustee Services Bank, Ltd. (Trust account)

1,999

1.5

STATE STREET BANK AND TRUST COMPANY 505001

1,456

1.1

GOVERNMENT OF NORWAY

1,417

1.1

Canon Marketing Japan Group Business Partner Stock Ownership Association

1,176

0.9

Japan Trustee Services Bank, Ltd. (Trust account 5)

1,073

0.8

Mizuho Bank, Ltd.

1,001

0.8

The Dai-ichi Life Insurance Company, Limited

879

0.7

Financial Statements

Number of Shares Held

Audit Reports

Name of Shareholders

Consolidated Financial
Statements(3) Major Shareholders

Notes: 1. The Company possesses 21,411,513 shares of its treasury shares (14.2% of the total number of issued shares).
2. The shareholding ratio is calculated by deducting the number of treasury shares from the total number of issued shares.

(4) Shareholding Ratio by Category

9.3%

Other domestic companies

51.2%

Foreign companies,
etc.

13.3%

Individuals
and others

11.4%

Treasury shares

14.2%

Reference

Financial
institutions

Securities companies 0.6%

Canon Marketing Japan Inc.

26

BUSINESS REPORT

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

Name

Business in Charge or Important Concurrent Posts

Chairman & Representative Director

Haruo Murase

President & Representative Director
Executive President

Masahiro Sakata

Director Senior Vice President

Yutaka Usui

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

Director Senior Vice President

Koichi Yagi

Company President of Imaging Systems Company

Director Senior Vice President

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

Director Senior Vice President

Yoshiyuki Matsusaka

Director in charge of Video Solutions Co-creation Project, Corporate
Planning Headquarters and Brand Communications Headquarters

Director Senior Vice President

Masachika Adachi

Company President of Business Solution Company

Director Vice President

Shiro HamadaGroup Executive of Accounting Headquarters

Director

Norihisa Doi

Director

Akio Dobashi

Audit & Supervisory Board Member

Masahiro Shimizu

Audit & Supervisory Board Member

Fumio Ogaki

Audit & Supervisory Board Member

Shigeo Hasegawa

Audit & Supervisory Board Member

Kunihiko Tedo

Audit & Supervisory Board Member

Nobuyasu Kusumi

Outside Director of Maeda Corporation

Notes: 1. Mr. Norihisa Doi and Mr. Akio Dobashi all of whom are Directors are Outside Directors.
2. Mr. Shigeo Hasegawa, Mr. Kunihiko Tedo and Mr. Nobuyasu Kusumi all of whom are Audit & Supervisory Board Members are Outside Audit & Supervisory
Board Members.
3. Director Akio Dobashi stepped down as outside director of OSJB Holdings Corporate on June 28, 2017.
4. The Company has notified Directors Mr. Norihisa Doi and Mr. Akio Dobashi as independent directors and Audit & Supervisory Board Members Mr. Shigeo
Hasegawa and Mr. Nobuyasu Kusumi as independent Audit & Supervisory Board Members to Tokyo Stock Exchange, Inc. on which the Company is listed asprovided under the regulations of Tokyo Stock Exchange, Inc.
5. Mr. Masahiro Shimizu and Mr. Fumio Ogaki all of whom are Audit & Supervisory Board Members have accounting experience in the Company for many years
and have a wealth of expertise in finance and accounting.
6. Mr. Shigeo Hasegawa is Audit & Supervisory Board Member and qualified as a Certified Public Accountant and has a wealth of expertise in finance andaccounting.
7. Mr. Kunihiko Tedo is Audit & Supervisory Board Members and has accounting experience in Canon Inc., our parent company, for many years and has a wealthof expertise in finance and accounting.
8. The Company has entered into contracts, in accordance with the Articles of Incorporation, with the Outside Director and the Audit & Supervisory Board
Members to limit their liabilities to compensate damages under Paragraph 1, Article 423 of the Companies Act of Japan, to the limit of amount set forth in the
Paragraph 1, Article 425 of the Companies Act of Japan.

27

Canon Marketing Japan Inc.

Notice of Convocation

 Directors
10 persons
 Audit & Supervisory Board Members 5 persons

Reference Documents For General
Meeting of Shareholders(2) Remuneration to Directors and Audit & Supervisory Board Members¥576 million¥114 million

Notes: 1. The total amount of remuneration paid to 2 Outside Directors and 3 Outside Audit & Supervisory Board Members is ¥90 million.
2. Directors’ remuneration include provision for directors’ bonuses for this fiscal year in the amount of ¥78 million.

(3) Status of Outside Director and Outside Audit & Supervisory Board Members
Name

Concurrent Post

Organization of Concurrent Post

Relation with The Company

Akio Dobashi(Outside Director)

Outside Director

Maeda Corporation

No special relation

Business Report Relation Between Important Organization of Concurrent Post and the Company

Consolidated Financial
Statements

Note: Director Akio Dobashi stepped down as outside director of OSJB Holdings Corporate on June 28, 2017, and has no special relationship with the company.

Norihisa Doi(Outside Director)

Attended all of 17 Board of Directors meetings held during this fiscal year, and provided input basedon his insight in information security when necessary.

Akio Dobashi(Outside Director)

Attended all 17 Board of Directors meetings held during this fiscal year, and provided input based on
his experience and knowledge in the field of corporate management.

Shigeo Hasegawa(Outside Audit &Supervisory Board Member)

Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held
during this fiscal year, and provided input based on his insight as a Certified Public Accountant whennecessary.

Kunihiko Tedo
(Outside Audit &Supervisory Board Member)

Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held
during this fiscal year, and provided input based on his experience and knowledge in the field of
accounting.

Nobuyasu Kusumi(Outside Audit &Supervisory Board Member)

Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held
during this fiscal year, and provided input based on his experience and knowledge in the field ofcorporate management.

Audit Reports

Principal Activities

Reference

Name

Financial Statements

 Principal Activities

Canon Marketing Japan Inc.

28

BUSINESS REPORT

4. Status of Accounting Auditor(1) Name of Accounting Auditor
Ernst & Young ShinNihon LLC(2) Remuneration and Other Amounts to Accounting Auditor for This Fiscal Year
Amount(i) R emuneration and other amounts payable by the Company for the services defined in Paragraph 1, Article 2 of theCertified Public Accountants Act¥99 million(ii) T otal amount of cash and other financial benefits payable by the Group to the Accounting Auditor¥181 million

Notes: 1. In the audit agreement between the Company and the Accounting Auditor, remuneration amounts are determined on a lump-sum without breakdown into
a separate remuneration amount for auditing in accordance with the Companies Act and in accordance with the Financial Instruments and Exchange Act.
Accordingly, the amounts shown in (i) above represent total amounts of remuneration and other amounts for 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 1of 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 year, and the estimated remuneration for this fiscal year. As a result, theAudit & Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor, upon judging it to be a rational level for maintaining
and improving audit quality.

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

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

29

Canon Marketing Japan Inc.

Notice of Convocation

5. Policy Regarding Decision of Dividends from Surplus, etc.

Reference Documents For General
Meeting of Shareholders

The Company made its basis policy, with respect to profit distribution, in the Three-Year Management Plan 2015 to 2017 to pay thedividends based on a consolidated payout ratio of 30% taking into consideration comprehensively the medium-term profit plan,
investment plan, and cash flows to be generated.
As to the dividends for this fiscal year, the Company plans to pay a year-end dividends of 35 yen per share, totaling 60 yen per share(consolidated payout ratio of 37.6%) as a full-year dividends together with the interim dividends (25 yen per share).

Reference

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Note: The amount and the number of shares described in this report are rounded down to the nearest number of the units indicated. Profit attributable to owners ofparent per share are rounded off to two decimal places.

Canon Marketing Japan Inc.

30

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

As of
As of
Dec. 31, 2017 Dec. 31, 2016
 Assets

 Liabilities¥397,506¥362,141

Cash and deposits

66,47976,785

Notes and accounts payable

Notes and accounts receivable

125,626

124,475

Short-term loans payable

147-

Securities

70,50030,500

Lease obligations

125

175

Merchandise and finished goods

Current assets

Current liabilities¥157,398¥156,966

100,940

102,662

32,07628,270Accrued expenses

18,16818,968Work in process

958

834

Accrued income taxes

6,289

4,689

Raw materials and supplies

836

875

Consumption taxes payable

4,586

4,296

Deferred tax assets

4,062

4,214

Provision for bonuses

3,443

3,473

Short-term loans receivable

90,01490,044

Provision for directors' bonuses

128

128

Other

7,050

6,263

Provision for product warranties

487

461

(98)

(121)

Provision for loss on order received

132

23

Allowance for doubtful receivables

113,325

135,585

22,94922,086

Property, plant and equipment

75,09096,701

Non-current liabilities

55,911

59,841

Buildings and structures, net

Non-current assets

Other

30,82547,425

Lease obligations

163

206

Machinery, equipment and vehicles, net

251

147

Deferred tax liabilities

438

422

Furniture and fixtures, net

3,732

3,963

Deferred tax liabilities for land revaluation

Rental assets, net

11,058

10,574

Allowance for long-term continuous service rewards

Land

29,01634,364

Lease assets, net

116

226

Construction in progress

89

-

-

6

961

961

Net defined benefit liabilities

49,60453,568

Other

4,743

4,675

213,310

216,808

Total liabilities

5,485

6,819

 Net assets

Software

5,153

6,443

Shareholders' equity

301,113287,571

Lease assets

1253

Capital stock

73,30373,303Right of using facilities

316

317

Capital surplus

82,82082,8202

4

Retained earnings

176,911

163,363

Investments and other assets

32,75032,064

Treasury stock(31,921)(31,914)

Investments in securities

9,027

7,422

Accumulated other comprehensive Income(4,081)(7,099)Long-term loans receivable29

10

Valuation difference on available-for-sale securities

3,159

2,328

Net defined benefit asset

404-

Deferred gains or losses hedges

6

(14)

Deferred tax assets

16,203

17,668Foreign currency translation adjustments

98

147

Lease deposits

4,880

4,824

Remeasurements of defined benefit plants(7,345)(9,560)

Other

2,532

2,483

Non-controlling interests

Allowance for doubtful receivables

(327)

(344)

¥510,832¥497,727

Intangible assets

Other

Total assets

31

As of
As of
Dec. 31, 2017 Dec. 31, 2016

Canon Marketing Japan Inc.

490

446

Total net assets

297,522

280,919

Total liabilities and net assets¥510,832¥497,727

¥629,313

408,417403,306

Gross profit

223,771

226,007

Selling, general and administrative expenses

193,365

198,331

Operating income

30,406

27,676

Non-operating income

1,328

1,405

Interest income

165

220

Dividend income

121

132

Insurance income

549

609

Other

493

443

Non-operating expenses

244

363

Interest expenses

12

15

Foreign exchange losses

11

78

Other

220

270

Ordinary income

31,491

28,717Extraordinary income

1,482

1,473

Gain on sales of noncurrent assets

879

774

Gain on sales of investments in securities

539

661

Other

63

36

2,054

1,287

Loss on sales and disposal of noncurrent assets

898

985

Impairment loss

1,033

131

Loss on disaster-

27

Extraordinary losses

Special extra retirement payments

100

5

Other

23

137

Profit before income taxes

30,91828,903

Income taxes-current

9,950

8,789

Income taxes-deferred

272

1,918

20,69518,195

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

15

33¥20,679¥18,161

Canon Marketing Japan Inc.

Notice of Convocation
Business Report¥632,189

Consolidated Financial
Statements

Net sales
Cost of sales

Financial Statements

From January 1, 2016
to December 31, 2016

Audit Reports

From January 1, 2017
to December 31, 2017

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

Reference

Consolidated Statements of Income32

NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-Consolidated Balance Sheets(Millions of yen, amounts less than one million yen are rounded down)

As of
As of
Dec. 31, 2017 Dec. 31, 2016
 Assets
Current assets
Cash and deposits
Notes receivable
Electronically recorded monetary claims - operating
Accounts receivable
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payment - trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Accounts receivable - other
Forward exchange contracts
Other
Allowance for doubtful receivables
Noncurrent assets
Property, plant and equipment
Buildings
Structures
Machinery
Furniture and fixtures
Rental assets
Land
Lease assets
Intangible assets
SoftwareLease assets
Right of using facilities
Investments and other assets
Investments in securities
Shares of subsidiaries and associates
Claims provable in bankruptcy, claims provable in rehabilitation and other

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

33

Canon Marketing Japan Inc.

As of
As of
Dec. 31, 2017 Dec. 31, 2016
 Liabilities¥358,772
50,6442,684
9,470
97,70170,50027,057
69
655
1,615
600
2,734
90,643
3,904
8
698
(216)
145,018
48,554
12,593
500
127
2,551
11,03821,675
66
4,265
4,147
7
110
92,198
7,414
71,010
202
599
9,718
2,198
1,279
(224)
¥503,790¥319,556
58,0692,877
8,341
96,01730,50022,834
72
601
1,526
527
2,871
90,550
4,195
3
680
(111)
164,726
67,18328,096
689
145
2,735
10,54324,829
144
5,211
5,085
15
110
92,331
6,646
71,010215
385
10,226
2,696
1,389
(238)
¥484,283

Current liabilities¥186,721
Electronically recorded obligations - operating
1,859
Accounts payable
96,874
Short-term loans payable
47,000
Lease obligations
51
Accounts payable - other
2,766
Accrued expenses
14,890Accrued Income taxes
5,037
Consumption taxes payable
2,530
Advances received
9,977
Deposits received
3,518
Provision for bonuses
1,672
Provision for directors' bonuses
78
Provision for product warranties
465
Non-current liabilities
33,182
Lease obligations
33
Provision for retirement benefits
27,957
Allowance for long-term continuous service rewards
565
Other
4,625
Total liabilities
219,903
 Net assets
Shareholders' equity
281,416
Capital stock
73,303
Capital surplus
85,204
Legal capital surplus
85,198Other capital surplus
5
Retained earnings
154,834
Legal retained earnings
2,853
Other retained earnings
151,980
Reserve for advanced depreciation of non-current assets
General reserve
81,700Retained earnings brought forward
70,280Treasury stock(31,924)
Valuation and translation adjustments
2,470
Valuation difference on available-for-sale securities
2,464
Deferred gains or losses hedges
6
Total net assets
283,887
Total liabilities and net assets¥503,790¥177,829
2,163
97,59838,66095
2,392
16,362
3,490
2,008
9,537
3,333
1,672
70
444
34,03684
28,987557
4,406
211,866
270,41373,30385,20485,1985
143,824
2,853
140,970
6
81,70059,264(31,918)
2,003
2,018
(14)
272,417¥484,283

¥479,457

Cost of sales

349,582

340,212Gross profit

139,522

139,245

Selling, general and administrative expenses

119,753

123,062

Operating income

19,76816,183Non-operating income

5,508

4,507

Interest income

162

217

Dividend income

4,618

3,511

Insurance income

542

561

0

3

183

214

Rent income of subsidiaries and affiliates
Other

395

315

Interest expenses

39

54

Share related expenses

56

58

Foreign exchange losses

2349

Non-operating expenses

Other
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investments in securities
Extraordinary losses
Loss on sales and disposal of noncurrent assets

275

153

24,881

20,375

502

639

8

2

493

637

713

1,089

701

376

Loss on valuation of shares of subsidiaries and associates

-

612

Other

12

100

Income before income taxes

24,67019,925

Income taxes-current

6,094

4,493

Income taxes-deferred

435

1,838

¥18,141¥13,593

ProfitCanon Marketing Japan Inc.

Notice of Convocation
Business Report¥489,105

Consolidated Financial
Statements

Net sales

Financial Statements

From January 1, 2016
to December 31, 2016

Audit Reports

From January 1, 2017
to December 31, 2017

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

Reference

Non-Consolidated Statements of Income34

AUDIT REPORTS
Accounting Audit Report of Accounting Auditor on Consolidated Financial Statements(TRANSLATION)
The Board of Directors
Canon Marketing Japan Inc.

Report of Independent Auditors

February 8, 2018

Ernst & Young ShinNihon LLC
Sayaka Shimura

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

Pursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprisethe consolidated balance sheet, the consolidated statement of income, the consolidated statement of changes in net assets and the notes to theconsolidated financial statements of Canon Marketing Japan Inc. (the “Company”) applicable to the fiscal year from January 1, through December
31, 2017.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the accounting
principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable
the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express an opinion from an independent perspective on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. The purpose of an audit of the consolidated financial statements is not to express an opinion
on the effectiveness of the entity’s internal control, but in making these risk assessments the auditor considers internal controls relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the appropriateness of accounting policies used, the method of their application, and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results ofoperations of the Canon Marketing Japan Group, which consisted of the Company and consolidated subsidiaries, applicable to the fiscal year
ended December 31, 2017 in conformity with the accounting principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act.

35

Canon Marketing Japan Inc.

The Board of Directors
Canon Marketing Japan Inc.

Notice of Convocation

Report of Independent Auditors

February 8, 2018

Ernst & Young ShinNihon LLC
Sayaka Shimura

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

Business Report(TRANSLATION)

Reference Documents For General
Meeting of Shareholders

Accounting Audit Report of Accounting Auditor

Consolidated Financial
Statements

Pursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying non-consolidated financial statements,
which comprise the non-consolidated balance sheet, the non-consolidated statement of income, the non-consolidated statement of changes in
net assets, the notes to the non-consolidated financial statements, and the related supplementary schedules of Canon Marketing Japan Inc. (the“Company”) applicable to the 50th fiscal year from January 1, 2017 through December 31, 2017.
Management’s Responsibility for the Financial Statements and the Related Supplementary Schedules
Management is responsible for the preparation and fair presentation of these non-consolidated financial statements and the related
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal
control as management determines is necessary to enable the preparation and fair presentation of the financial statements and the related
supplementary schedules that are free from material misstatement, whether due to fraud or error.

Audit Reports

Financial Statements

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

Reference

OpinionIn our opinion, the non-consolidated financial statements and the related supplementary schedules referred to above present fairly, in all material
respects, the financial position and results of operations of Canon Marketing Japan Inc. applicable to the 50th fiscal year ended December 31, 2017
in conformity with accounting principles generally accepted in Japan.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act.

Canon Marketing Japan Inc.

36

AUDIT REPORTS

Audit & Supervisory Board’s Report
Audit Report
We, Audit & Supervisory Board has discussed and prepared this Audit Report based on the audit reports prepared by each of the Audit & Supervisory Board Members pertaining to the
conduct of duties by the Directors of Canon Marketing Japan Inc. during the 50th fiscal year from January l, 2017 to December 31, 2017, and reports as follows.
1. Methods and Substance of Audit by Audit & Supervisory Board Members and Audit & Supervisory Board(1) We decided on the auditing policies and the allocation of work duties, etc., received a report on the auditing work performed and the results from each Audit & Supervisory Board
Member, and received a report on the status of the work executed from the Directors and the Independent Auditor and requested their explanations as necessary.
(2) While confirming to the auditing standards as decided by us, the auditing policies and the allocation of duties, etc., each Audit & Supervisory Board Member endeavored tofacilitate mutual understanding with the Directors, the internal audit office and other employees, etc. to collect information and improve the auditing environment. Our audit
procedures were as follows.
i)	We attended the meetings of the Board of Directors and other important meetings, received reports on the status of the work executed from the Directors and the employees
and requested their explanations as necessary, inspected material internal decision-making documents, etc., and investigated the status of the operations and assets of theheadquarters and major business sites. In addition, with respect to the subsidiaries, we communicated and exchanged information with the Directors and Audit & Supervisory
Board Members of the subsidiaries, and received reports on business from the subsidiaries as necessary.
ii)	The following systems (Internal Control System) were determined by a Board of Directors’ resolution and designed based on this resolution. We periodically received reports
from the Directors, employees and others, requested explanations as necessary regarding the design and implementation of the Internal Control Systems, and expressed
opinions on the substance of the decisions made by the Board of Directors with regard to the Internal Control Systems.
(a) A system for ensuring that the performance of duties by the Directors complies with the applicable laws and regulations and Articles of Incorporation.
(b)	A system for ensuring the Directors’ performance of the adequate operations of Canon Marketing Japan Group, which consists of the Company and its subsidiaries as
stipulated under Article 100, paragraphs l and 3 of the Ordinance for Enforcement of the Companies Act.
iii)	We examined the contents of the matters considered and the assessment and reasons detailed in this Business Report for the transactions with the Parent Company under
Article 118 of the Ordinance for Enforcement of the Companies Act, taking into account the status of the deliberations of the Board of Directors, etc.
iv)	We monitored and verified whether the independence of the Accounting Auditor was maintained and whether an appropriate audit was being undertaken, received reports
from the Accounting Auditor on the status of operations, and requested explanations as necessary. We also received reports from the Accounting Auditor stating that thenecessary systems for ensuring the appropriate execution of operations (pursuant to Article 131 of the Rules of Corporate Accounting) were duly developed in line with the
Quality Control Standards for Auditing (issued by the Business Accounting Council on October 28, 2005), and other relevant standards, and requested explanations as necessary.
Based on the above procedures, we examined the Business Report and its supplementary schedules, the non-consolidated financial statements for the relevant fiscal year (thebalance sheets, the statements of income, the statement of changes in equity and the notes to the non-consolidated financial statements) and their supplementary schedules as wellas the consolidated financial statements for the relevant fiscal year (the consolidated balance sheets, the consolidated statements of income, the consolidated statements of changes
in equity and the notes to the consolidated financial statements).
2. Results of Audit(1) Results of examination of the Business Report, etc.
a) In our opinion, the business report and its supplementary schedules conformity with the applicable laws and regulations of Japan and the Articles of Incorporation of theCompany and fairly present the state of the Company’s affairs;b) We have found no misconduct or material fact constituting a violation of any applicable laws and regulations of Japan or the Articles of Incorporations in connection with the
Directors’ performance of their duties; andc) In our opinion, the substance of the decisions made by the Board of Directors with regard to the Internal Control Systems is appropriate. Furthermore, we found no matters that
require noting with regard to the description in the Business Report and the Directors’ performance of their duties in connection with the relevant internal control systems; andd) With respect to the transactions with the Parent Company, etc. that are described in this Business Report, we have found no matters that require noting with regard to thematters considered by Board of Directors and the Board of Directors’ assessment and factors that might be adverse to the Company’s interests.
(2) Results of examination of the financial statements and their supplementary schedules
In our opinion, the auditing methods used and the conclusions reached by the Accounting Auditor, Ernst Young ShinNihon LLC, are appropriate.
(3) Results of examination of the consolidated financial statements
In our opinion, the auditing methods used and the conclusions reached by the Independent Auditor, Ernst Young ShinNihon LLC, are appropriate.

February 8, 2018

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

37

Canon Marketing Japan Inc.

Kunihiko Tedo
Nobuyasu Kusumi

Notice of Convocation

Reference
List of Canon MJ Group Companies(As of January 1, 2018)

Lines of Business

Reference Documents For General
Meeting of Shareholders

Company Name
Canon Marketing Japan Inc.

SuperStream Inc.

Planning, development, and sales of SuperStream NX management infrastructure solution for accounting and salaries

Qualysite Technologies Inc.

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

Canon Software America, Inc.

Development and operation of various business application softwares for the Group Companies

Canon Information Systems(Shanghai) Inc.

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

Canon IT Solutions (Thailand) Co., Ltd.

Supervision of Group Companies in Thailand and Vietnam

Consulting, support for business process optimization, back office business process optimization, office support,
contact center, temp staffing, and services

Edifist Learning Inc.

Consulting of human resource development, various trainings and ancillary services

Canon System & Support Inc.

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

A&A Co., Ltd.

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

Canon Production Printing Systems Inc.

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

Commercial Printing Lab Inc.

Creation of digital printing business, content production, and printing business (inkjet continuous feed printers,
production printers, and offset printing machinery)

Canon Lifecare Solutions Inc.
Elquest Corporation

Financial Statements

Canon BizAttenda Inc.

Consolidated Financial
Statements

Proposition, sales and services of IT hardware and software

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

Material Automation (Thailand) Co., Ltd.

Business Report

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

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

Canon ITS Medical Inc.

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

AZE, Ltd.

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

Canon Customer Support Inc.

Operation of customer support centers primarily dealing with Canon products, technical support services, acceptanceindividual consumer products for repair and maintenance, photo business services

Canon Business Support Inc.

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

Reference

Canon IT Solutions Inc.

Notes: 1. There are 23 consolidated subsidiaries (including 4 companies such as domain name management companies.)
2. Sales figures for major subsidiaries (2017) were as follows: Canon System & Support Inc. ¥121.38 billion, Canon Production Printing Systems Inc. ¥13.73 billion, Canon IT Solutions Inc.
¥84.70 billion, Canon Lifecare Solutions Inc. ¥13.67 billion

Canon Marketing Japan Inc.

38

On February 1, 2018, the Canon Marketing Japan Groupcelebrated the 50th anniversary of its founding
In February 1968, Canon’s domestic sales division was spun off to establish Canon Business
Machines Sales Inc. and Canon Business Machine Services Inc. A year later in 1969, Canon Camera
Sales Co., Inc. was founded. Then, in 1971, the three companies merged to form Canon Sales Co.,
Inc., the predecessor to Canon Marketing Japan.
In 2006, the corporate name was changed to the current Canon Marketing Japan Inc. In 2018, thecompany will observe the 50th anniversary of its founding.

Highlights

1968

1971

1983

2006

Listed in the First

Name Changed

2018

Canon Business
Machines Sales
Inc.
Canon Business

Canon’s
Domestic Sales
Division

Machine Services
SpunoffInc.

1969
Canon Camera
Sales Inc.

39

Canon Marketing Japan Inc.

Canon Sales
Co., Inc.
is Established

Section of theto Canon

50thTokyo Stock

Marketing

Anniversary

Exchange

Japan Inc.

Notice of Convocation

2000 to 20092010 to 2018

Production andsales units weresplit off from one
another in order to
conduct businessin closer proximity
to customers. A
manufacturer’s sales
company structure
for cameras andbusiness machines isestablished.

Seeking to expand
operations, sales
channels arestrengthened. The
company launches
and expands
independent
businesses for nonCanon products,
including the importand sale of PCs andsoftware.

In response to rapidly
advancing digitizationand networking, asystem integration
business is launched
to combine hardware
and software fromother companies in
addition to Canon
products.

An aggressive
reorganization is
implemented toachieve overall
Group optimization,and consolidated
management isestablished.
Aggressive M&A
activities are
implemented
to reinforce thefoundations of the IT
solutions business.

Embracing the key
phrase “Beyond
Canon, Beyond Japan”
to represent businessdiversification,
Canon expands
its independent
businesses including
IT solutions.
A new organizational
structure is adopted tostrengthen customer
contact points andexpand the business.

surrounding customers has changed at abewildering pace, but we have continued toembrace our focus on marketing, making every
effort to not only sell Canon products, but toSpecial 50th Anniversary Website
On February 1, the Special 50th Anniversary website
opened under the Corporate Information section ofCanon Marketing Japan.
The website includes information on the company’s
history and other topics, and can be viewed at thefollowing address: canon.jp/cmj-50th

Financial Statements

Over the past five decades, the environment

Reference Documents For General
Meeting of Shareholders

1990 to 1999

Business Report1980 to 1989

Consolidated Financial
Statements

Establishment to 1979

Audit Reports

always deliver proposals developed from acustomer perspective. Looking ahead, we willleverage our strengths in Canon products andthe IT capabilities of Canon Marketing Japan

Reference

to become a true partner to our customers byproviding them with solutions that solve theissues they confront.
Canon Marketing Japan Inc.

40

Details of our Communication Activities
WebsitePresentations and IR Events

On our Investor Relations website, we provide a range of

In August, we exhibited at the 12th Nikkei IR Investment Fair 2017,

information for shareholders and investors, including notices andan event aimed at individual investors. We also held company

reports on company presentations and other events.

presentations for individual investors throughout the year at

Our Investor Relations website was selected as a Grade AAA

the branches of securities firms. We hope to create a lot morewebsite in the 2017 All Japanese Listed Companies’ Website

opportunities like this in the future, and will post details of

Ranking compiled by Nikko Investor Relations Co., Ltd. We arescheduled events on the website as soon as they are available.

committed to maintaining a straight-forward IR site and enhancing
content even further in the future, so as to give investors an evenbetter understanding of Canon MJ.

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

General Stock Information
 Fiscal Year

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

December 31 of each year Record date for dividends End-of-year dividend: December 31 of each year
Interim dividend: June 30 of each year41 Manager of the registerof shareholders

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

 Business handling place

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

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

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

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

 Stock exchange listings

Tokyo Stock Exchange (First Section)

 Securities code

8060

Canon Marketing Japan Inc.

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

the relevant securities firm with any inquiries.
* However if your inquiry concerns payment of unpaid dividends orprovision of a payment statement, please contact the Manager of theregister of shareholders (Mizuho Trust & Banking Co., Ltd.: 0120-288-324(toll-free)).
 If your shares are not managed by a securities firm, pleasecontact the following division with any inquiries
Stock Transfer Agency Department of Mizuho Trust & Banking
Co., Ltd.
0120-288-324 (toll-free)