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. Securities Code: 8060 March 6, 2023 TO OUR SHAREHOLDER Canon Marketing Japan Inc. 16-6, Konan 2-chome, Minato-ku, Tokyo Masachika Adachi President & Representative Director
NOTICE OF CONVOCATION OF
THE 55TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 55th Ordinary General Meeting of Shareholders of Canon Marketing Japan Inc. (the "Company") will be held as described below. In the convocation of this General Meeting of Shareholders, information contained in the Reference Documents for the General Meeting of Shareholders, etc. (the "matters to be provided electronically") will be provided electronically and posted as the "Notice of Convocation of the 55th Ordinary General Meeting of Shareholders" on the Company's website on the Internet. Please visit the following website for the Company to access this information. The Company’s website https://cweb.canon.jp/eng/ir/stock/generalmeeting.html In addition to the above website, the matters to be provided electronically will also be posted on the website of the Tokyo Stock Exchange (TSE). Please access the following website for the TSE (Listed Company Search) and input or search with the relevant issue name (company name) or securities code, and select "Basic information" followed by "Documents for public inspection/PR information" to peruse the information that has been posted. The Tokyo Stock Exchange's website (Listed Company Search) https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show Although the Company will ensure that appropriate measures are taken to prevent the spread of COVID-19 at the General Meeting of Shareholders, we request that you monitor your personal health and the situation surrounding the spread of infections and consider refraining from coming to the meeting in person based on the present state of affairs. With regard to exercising your voting rights in writing or via the Internet, after reviewing the following Reference Documents for General Meeting of Shareholders, please exercise your rights by no later than 5:30 p.m. on March 28 (Tuesday), 2023 (Japan time). March 29 (Wednesday), 2023 at 10:00 a.m. (Japan time) 1.  DATE AND TIME Headquarters of the Company 2. PLACE 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 1. Reports on the contents of the Business Report and Consolidated Matters to be Financial Statements for the 55th Fiscal Year (from January 1, 2022 to Reported: December 31, 2022), and reports on the Auditing Results of Accounting Auditor and Audit & Supervisory Board regarding the Consolidated Financial Statements. 2. Reports on the content of the Non-Consolidated Financial Statements for the 55th Fiscal Year (from January 1, 2022 to December 31, 2022).
・・・ ■ 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. . Among the matters to be provided electronically, in accordance with the related laws and regulations and Article 14 of the Company's Articles of Incorporation, the following matters are not included in the paper copy to be sent to shareholders who have requested it. Accordingly, the paper copy to be sent to shareholders who have requested it represent only part of the applicable documents which the Audit & Supervisory Board Members and Accounting Auditor audited to prepare their audit reports. (1) Stock Acquisition Rights etc. of the Company and Systems for Ensuring Appropriateness of Business Operations and Outline of Implementation Activities to be described in the Business Report (2) Consolidated Statements of Shareholders' Equity and Notes to Consolidated Financial Statements (3) Non-Consolidated Statements of Shareholders' Equity and Notes to Non-Consolidated Financial Statements . Any revisions to the matters to be provided electronically will be posted as detailed before and after revision on the Company's website and the TSE's website on the Internet as listed above.
In order to prevent the spread of COVID-19, we would like to ask for your understanding and cooperation in giving top priority to the health and safety of all shareholders, and implementing the following measures at the meeting. © Due to the wide space that will be provided between seats for shareholders, the number of seats available will be significantly decreased as per last year. For this reason, there is a possibility that you may be unable to take a seat even if you come to the venue on the day of the meeting. © From the perspective of preventing the spread of infection, the time for the proceedings of this General Meeting of Shareholders will be shortened. We appreciate your understanding. © If a shareholder is determined to be in poor health before the reception on the day of the meeting, including instances when a shareholder is feverish, we may take necessary measures to prevent the spread of infection, such as restricting admission to the meeting room. The above measures are subject to change depending on the situation of the spread of the COVID-19 up to the day of this General Meeting of Shareholders and the announcements made by the government and other organizations. Please visit our website for any changes to be made to the General Meeting of Shareholders.
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 Reference Documents for the General Meeting of Shareholders included in the matters to be provided electronically, please exercise your voting rights. The Voting rights can be exercised in one of the following three ways. Exercise of Voting Rights by Attending the Meeting March 29 (Wednesday), 2023 at 10:00 a.m. (Japan time) DATE AND TIME: Headquarters of the Company PLACE: CANON HALL S, 3rd floor of CANON S TOWER 16-6, Konan 2-chome, Minato-ku, Tokyo Please bring and present the enclosed Voting Form to the receptionist at the place of the Meeting. Exercise of Voting Rights in Writing (Via Postal Mail) Deadline for exercising The Voting Form must reach us no later than 5:30 p.m. on March 28 (Tuesday), 2023 (Japan time) voting rights: Please indicate your for/against for each of the propositions on the enclosed Voting Form and return it by postal mail. If neither for nor against are indicated for each of the propositions on the Voting Form, we will treat this as indicating an intention to vote in favor of the proposal. Exercise of Voting Rights by Electromagnetic Means (Via the Internet) The exercise of voting rights must be made no later than Deadline for exercising 5:30 p.m. on March 28 (Tuesday), 2023 (Japan time) voting rights: Please enter your for/against for each of the propositions on the website for the exercise of voting rights (https://soukai.mizuho-tb.co.jp/) and send it. * If voting rights are exercised in duplicate via the Internet and via postal mail, votes made via the Internet will be deemed to be valid. * If you exercise your voting rights more than once via the Internet, we will treat the last exercise of your voting rights as effective. * Please note that you may not be able to access the website for the exercise of voting rights depending on your Internet operating environment, your Internet service or the model of the device you use. * Any internet connection charges, communication charges or other fees incurred when you access the website for the exercise of voting rights shall be borne by you.
How to the enter the voting code and password Website for the exercise of voting rights https://soukai.mizuho-tb.co.jp/ Access the website for the exercise of voting rights. 1. Click on the “Next” button. Enter your voting code shown on your voting form. 2. Enter voting code. Click on the “Next” button. Enter your password shown on your voting form. 3. Enter password. Click on the “Log-in” button. Indicate your approval or disapproval of the resolutions by following the directions on the screen. 4. How to scan the QR code using your smartphone “Smart voting” You can log-in to the voting website without having to enter your voting code or password. Scan the OR code printed on the bottom-right of the voting form. 1. * "QR code" is a registered trademark of DENSO WAVE INCORPORATED. Indicate your approval or disapproval of the resolutions by following the directions on the screen. 2. You can exercise your voting rights ONLY ONCE by “smart voting.” If you wish to change your vote after exercising your voting rights by "smart voting," please access the PC version of website for the exercise of voting rights, login by entering your voting code and password shown on the voting form and vote again. * Scanning the QR code again can take you to the PC version website for the exercise of voting rights. If you have any questions about use of the voting website or “smart voting,” please contact: Internet Help Dial: Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd. Telephone: 0120-768-524 (toll-free) Operating Hours: 9:00 a.m. to 9:00 p.m. (excluding New Year's holiday period) Platform for Electronic Exercise of Voting Rights The electronic voting platform for institutional investors operated by Investor Communications Japan Inc. is available for nominee shareholders such as trust & custody services banks, etc. (including standing proxies) that have applied to use such platform in advance.

Item No. 1: Dividends from Surplus
We have comprehensively considered the business results, etc. for this Fiscal Year, and propose a year- end dividend as described below. Thus, the full-year dividends will be 90.00 yen per share, which includes interim dividends of 40.00 yen per share. Although it is provided in the Articles of Incorporation that the dividends from surplus, etc. may be decided by a resolution of the board of directors, we have made it a matter to be resolved at this Meeting to have an opportunity to hear the shareholders' views directly.
(1) Type of dividend:
Cash (2) Matters concerning distribution of dividend and its total amount: 50.00 yen per common share of the Company Total amount of dividend 6,483,820,000 yen (3) Effective date of the dividend from surplus: March 30, 2023 <REFERENCE> Changes in dividends (yen) Item No. 2: Election of Seven Directors
The term of offices of all of the seven Directors will expire at the end of this Meeting. Accordingly, we would like to elect seven Directors. The candidates for the position of the Directors are as follows: Notes:  1.  Attendance at Board of Directors' meetings for Mr. Tsuyoshi Osato and Mr. Toshiharu Hasebe refers to the Board of Directors' meetings that were held after their election at the 54th Ordinary General Meeting of Shareholders held on March 29, 2022. 2. In the above list for the candidates for Directors who currently serve as members of the Nomination and Remuneration Committee, the "◎" symbol denotes the chairperson and the “○” symbol indicates a member. <REFERENCE> Changes in the number of members of the Board of Directors Independent Outside Directors included Independence of the Board of Directors after the election
Skills Matrix of the Candidates for Director

Notes: 1. None of the candidates for the Directors have any special interest in the Company. 2. The Company has registered Mr. Yoshio Osawa and Mr. Toshiharu Hasebe as independent directors with the Tokyo Stock Exchange, Inc. under the regulations of the Exchange. Should Mr. Yoshio Osawa and Mr. Toshiharu Hasebe be elected, the Company will continue to make both of them independent directors. In addition, should Ms. Hiroko Kawamoto be elected, the Company will register her as an independent director with the Tokyo Stock Exchange, Inc. under the regulations of the Exchange. 3. Mr. Yoshio Osawa has worked for Sumitomo Corporation and SCSK Corporation, both of which do business with the Company. Although there are business transactions between Sumitomo Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of Sumitomo Corporation and the Company respectively. Similarly, although there are business transactions between SCSK Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of SCSK Corporation and the Company respectively. Mr. Yoshio Osawa, therefore, meets the standards for Independence Standards for Independent Directors determined by the Company. 4. Mr. Toshiharu Hasebe has worked for NTT Communications Corporation and NTT Advertising, Inc. (including their subsidiaries; the same applies hereinafter), both of which do business with the Company. Although there are business transactions between NTT Communications Corporation and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of NTT Communications Corporation and the Company respectively. Similarly, although there are business transactions between NTT Advertising, Inc. and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of NTT Advertising, Inc. and the Company respectively. Mr. Toshiharu Hasebe, therefore, meets the standards for Independence Standards for Independent Directors determined by the Company. 5. Ms. Hiroko Kawamoto has worked for All Nippon Airways Co., Ltd., of which does business with the Company. Although there are business transactions between All Nippon Airways Co., Ltd. and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of All Nippon Airways Co., Ltd. and the Company respectively. In addition, she serves as an Adviser of ANA Strategic Research Institute Co., Ltd. Although there are business transactions between ANA Strategic Research Institute Co., Ltd. and the Company, the annual amount of the transactions is less than 1% of the consolidated revenue of ANA Strategic Research Institute Co., Ltd. and the Company respectively. Ms. Hiroko Kawamoto, therefore, meets the standards for Independence Standards for Independent Directors determined by the Company. 6. The Company has entered into a contract with Mr. Yoshio Osawa and Mr. Toshiharu Hasebe, limiting the amount of their damages compensation liability defined in Paragraph 1, Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should they be elected, the Company will continue the aforementioned contract with them. In addition, should Ms. Hiroko Kawamoto be elected, the Company will enter into the same limited liability contract with her. 7. The Company has entered into a liability insurance policy for officers under which all the Directors are insured persons. The policy covers damage or losses that may arise from their assuming liabilities in connection with their execution of duties or claims filed against them for such liabilities. If the candidates assume the office of Director, they will become insured persons under the insurance policy, which will be renewed during their term of office.

Structure of Board of Directors
We have established a structure that mainly consists of Representative Directors who oversee company-wide business strategies and their execution, and Executive Directors who oversee each business domain or each headquarters function. In addition, two or more Independent Outside Directors are included as members of the Board of Directors to ensure the soundness of management. The Board of Directors handles important decision-making and oversees the performance status of business operations in accordance with laws and regulations.
Structure of Audit & Supervisory Board
As an auditing organization independent from the Board of Directors, the Audit & Supervisory Board consists of persons who have considerable knowledge of the Company's business and corporate management, and persons who are well-versed in accounting and other professional fields. At least one of the Outside Audit & Supervisory Board Members is a person who satisfies the independence standards and qualifications separately prescribed by the Board of Directors. The Audit & Supervisory Board made up of these Members works together with the accounting auditors and the internal audit division of the Company to audit the execution of duties by Directors and the status of assets of the Company to ensure the soundness of management. Policies and procedures in the Nomination of Director and Audit & Supervisory Board Member Candidates 1. Policies In principle, we select candidates for Directors and Audit & Supervisory Board Members appointed as higher positions from among the persons who are recognized as being able to perform the corresponding duties fairly and accurately, who have deep insight, and who satisfy the following requirements, regardless of their gender, nationality, age, or other personal attributes.
<Directors>
The candidates must have a true understanding of the Company's corporate philosophy and Code of Conduct, a broad and deep understanding of the Company's business and operations through experience gained as Executive Officers, etc., and must be able to make effective judgment from a comprehensive perspective of multiple businesses and headquarters functions. <Independent Outside Directors> The candidates must satisfy the independence standards and qualifications separately prescribed by the Board of Directors and must have a high degree of professionalism and abundant experience in corporate management, risk management, law, economics, and other fields. <Audit & Supervisory Board Members> The candidates must have a high degree of professionalism and a wealth of experience in corporate management, financial and accounting matters, internal controls, and other fields. One or more candidates for Outside Audit & Supervisory Board Members of the Audit & Supervisory Board must satisfy the independence standards and qualifications separately prescribed by the Board of Directors.
Procedures
2.
The Company established the voluntary "Nomination and Remuneration Advisory Committee" consisting of the President & Representative Director, one Director and two Independent Outside Directors. In nomination of candidates for Directors/Audit & Supervisory Board Members (including successor to President and candidates therefor), the President recommends candidates from among persons who are recognized to satisfy the prescribed requirements and the fairness/ appropriateness of recommendation is checked by the nomination committee. Then the proposal therefor is submitted to and deliberated by the Board of Directors. In addition, in regards to candidates for Audit & Supervisory Board Members, deliberation at the Audit & Supervisory Board meeting is conducted and the consent of the board is obtained prior to deliberation at the Board of Directors meeting. "Independence Standards for Independent Directors/Audit & Supervisory Board Members" of Canon Marketing Japan Inc. Canon Marketing Japan Inc. hereby establishes the "Independence Standards for Independent Directors/Audit & Supervisory Board Members" resolved by the board of directors with the consent of all Audit & Supervisory Board Members, in order to clarify the standards for ensuring independence of Independent Directors/Audit & Supervisory Board Members of Canon Marketing Japan Inc., taking into consideration Japan's Corporate Governance Code (Principle 4.9) and the independence criteria set by securities exchanges in Japan.
Independence Standards for
Independent Directors/Audit & Supervisory Board Members
Canon Marketing Japan Inc. deems that a person who satisfies the requirements for Outside Directors/Audit & Supervisory Board Members prescribed by the Companies Act of Japan, and meets the independence criteria set by securities exchanges in Japan, and does not fall into any of the items below, is an "Independent Director/Audit & Supervisory Board Member" (a person who is independent from the management of Canon Marketing Japan Inc. and unlikely to have conflicts of interest with general shareholders). A person/organization for which Canon Marketing Japan Group (Canon Marketing Japan Inc. and its 1. subsidiaries; hereinafter the same) is a major 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 A person/organization receiving large amounts of contributions from Canon Marketing Japan Group, 3. or an executing person of such organization A consultant, accounting professional or legal professional who has received a large amount of money 4. 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.) A certified public accountant belonging to the audit firm engaged to conduct the statutory audit of 5. Canon Marketing Japan Group (including any such accountant to whom this item has applied in the last 3 fiscal years) An executing person of another company in cases where an executing person of Canon Marketing 6. 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 to 6; 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 (Notes) In item 1, "major" means in cases where the total amount (for any fiscal year during the last 3 fiscal years) of transactions between Canon Marketing Japan Group and such client exceeds 1% of the consolidated sales of Canon Marketing Japan Group or such client. ** In item 2, "a large shareholder" means a shareholder who directly or indirectly holds 5% or more of the total voting rights of Canon Marketing Japan Inc. * In item 3, "a large amount" means in cases where the total amount of contributions exceeds ¥12 million (in cases where the recipient is an individual) or 1% of the annual 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 item 1 to 3, and 6, an "executing person" means an executive director, executive officer and employee including manager (in items 1 to 3, including a person to whom this item has applied in any fiscal year during the last 3 fiscal years).本In item 4, "a large amount" means in cases where the total amount of money or other properties received by said consultant, etc., exceeds ¥12 million (in cases where the recipient is a person) or 1% of the annual gross sales of such consultant, etc. (in cases where the recipient is an organization). Item No. 3: Payment of Bonuses to Directors It is proposed that bonuses will be paid to the four Directors excluding the Outside Directors as of the end of this fiscal year, in appreciation of their services during this fiscal year, which totals ¥46,800,000 considering the results for this fiscal year, etc. The Company established the Policy to Determine the Details of the Remuneration of Individual Directors at its Board of Directors meeting held on March 29, 2022, the summary of which is found on the Business Report. The Company considers this proposal appropriate, as it is in line with this policy.
(Note)The amount and the number of shares described in this report are rounded down to the nearest number of the units indicated. Net income attributable to owners of parent per share are rounded off to two decimal places.
1.  Current Conditions of Canon Marketing Japan and its consolidated
subsidiaries (the “Group”)
(1)
Business Progress and Achievement
General Business Conditions
The Japanese economy is demonstrating a continuing trend toward gradual recovery as the nation progresses into a new stage of life under the COVID-19 pandemic. Consumer spending is seeing signs of a gentle pickup with recovery in the consumption of services in sectors such as travel and restaurants. As for capital expenditures by businesses, factors such as the gradual recovery in overseas economies and progress on the normalization of economic and social activities within Japan contributed to some recovery. In particular, IT investment trended favorably, stimulated by high investment appetite in the manufacturing and financial industries. On the other hand, weakness persists in a part of the corporate sphere caused mainly by supply constraints due to semiconductor shortage and disruptions in the supply chain, rise in raw material prices due to the situation in Ukraine, etc., and exchange rate fluctuations. Against this economic backdrop, the Group expanded sales by resolving supply constraints on Canon products, as well as sales of SI services and security-related products and services backed by active corporate investments in IT, and sales of products such as semiconductor manufacturing systems backed by active investments from domestic semiconductor manufacturers. As a result, net sales increased to ¥588,132 million (up 6.5% from the previous fiscal year). In terms of income, gross profit rose as a result of increased sales. Operating income was ¥49,947 million (up 25.8% from the previous fiscal year), ordinary income was ¥50,991 million (up 24.1% from the previous fiscal year), and net income attributable to owners of parent was ¥35,552 million (up 20.8% from the previous fiscal year). Business results by individual reporting segments are indicated below. Increases and decreases are in relation to the previous fiscal year. Professional Net sales ¥41,670 million Area Net sales ¥226,560 million Business Conditions by Segment Consumers
In terms of the digital interchangeable lens camera, sale of RF interchangeable lenses were expanded and sales increased significantly, as sales increased for products such as mirrorless cameras equipped with EOS R systems, including the EOS R3 launched at the end of 2021, the EOS R7 launched in June, the EOS R10 launched in July and the EOS R6 Mark II launched in December, and the population of EOS R users continued to increase. In inkjet printers, sales increased as a result of high-priced products having performed well in addition to other factors. Sales of ink cartridges decreased due to a shrinking market caused by factors such as a decline in the volume of color printing. As for IT products, although impacted by supply shortages of PC peripherals and other products, sales increased slightly as products such as gaming PCs performed well. As a result, net sales in this segment totaled ¥136,612 million (up 5.5% from the previous fiscal year). Operating income was ¥13,940 million (up 2.7% from the previous fiscal year) due to a rise in gross profit from increased sales. Mirrorless camera EOS R7
Enterprise

In mainstay business equipment, despite being significantly impacted by supply shortages of products until the second quarter, sales of office MFPs and laser printers increased significantly due to a recovery in supply from the third quarter. Sales of maintenance services for office MFPs and laser printer cartridges decreased due to a decline in print volume in offices due to continued teleworking initiatives primarily in major corporations. In IT solutions, sales increased significantly due to increased sales of SI projects for the manufacturing and financial sectors, as well as the solid performance of sales of security projects and the second data center building. As a result, net sales in this segment totaled ¥202,730 million (up 6.4% from the previous fiscal year). Operating income was ¥17,072 million (up 23.2% from the previous fiscal year) due to efforts to reduce SG&A expenses, in addition to a rise in gross profit from increased sales. Color Laser Beam Printer LBP853Ci that can handle A3 paper Nishi-Tokyo Data Center
In mainstay business equipment, despite being significantly impacted by supply shortages of products until the second quarter, sales of office MFPs and laser printers increased due to a recovery in supply from the third quarter. As for office MFP maintenance services, sales decreased due to a decline in print volume in offices as teleworking initiatives continued mainly in large city areas. On the other hand, laser printer cartridges saw an increase due to factors such as front-loaded demand in anticipation of price revisions. As for IT solutions, sales of security products such as the cloud-based IT support service HOME and anti-virus software ESET increased, backed by increasing threats to information security such as targeted attacks and phishing. The Company also continued to focus on acquiring maintenance services and operation services for customers' IT devices, and the number of orders received increased, resulting in increased sales. Thus, sales of overall IT solutions increased. As a result, net sales in this segment totaled ¥226,560 million (up 2.6% from the previous fiscal year). Operating income was ¥15,563 million (up 29.2% from the previous fiscal year) due to efforts to reduce SG&A expenses, in addition to a rise in gross profit from increased sales. ESET Internet Security
(Production Printing)
In the production printing business, the Company provides high-speed continuous feed printers and high- speed cut sheet printers mainly for the printing industry. The Company also provides services related to POP production for the retail industry. During the fiscal year under review, sales increased slightly due to factors such as the strong performance of continuous feed printers for customers in the printing industry.
(Industrial Equipment)
In the industrial equipment business, the Company provides manufacturing-related equipment, inspection and measurement devices, and other products mainly to semiconductor manufacturers. During the fiscal year under review, sales increased significantly as semiconductor manufacturing systems and maintenance services trended favorably backed by investments from domestic semiconductor manufacturers remaining active.
(Healthcare)
In the healthcare business, the Company provides medical information systems such as electronic medical records for hospitals, clinics, dispensing pharmacies and medical centers. During the fiscal year under review, sales increased significantly mainly due to projects to introduce online insurance eligibility verification systems for clinics and dispensing pharmacies in addition to several large-scale projects for the construction of electronic medical records and medical IT platforms for hospitals. As a result, net sales in this segment totaled ¥41,670 million (up 32.1% from the previous fiscal year). Operating income increased to ¥5,240 million (up 110.6% from the previous fiscal year) due to efforts to reduce SG&A expenses, in addition to a rise in gross profit from increased sales. varioPRINT iX3200 / 2100 Ashing device Suprema made by Mattson
Capital Expenditures
(2)
The capital expenditures by the Group during this fiscal year totaled ¥8,163 million, which are mainly for rental assets, tools, fixtures and fittings, and ancillary facilities at our Nishi-Tokyo Data Center.
Issues to be Addressed
(3)
While the Japanese economy is likely to enter a recovery trend, we expect that the outlook will remain unclear due to the impact of COVID-19 with its mutant strains on domestic and overseas economies; supply constraints due to semiconductor shortage and disruptions in the supply chain; trends in raw material and energy prices impacted by the situation in Ukraine, and other factors. Against this economic backdrop, the Group recognizes that it needs to further increase its earnings capacity in the Canon product business. On the other hand, the IT solution business, which has market growth potential, is faced by the task of expanding sales in a manner that also increases earnings capacity. The Long-Term Management Objectives (2021-2025) announced in April 2021 defined our vision as a "professional corporate group that solves social and customer issues using ICT and the power of humans." The Medium-Term Management Plan (2022-2025) was formulated to achieve this vision. We will work to expand our operations and improve our performance by implementing the four basic policies in the Medium-Term Management Plan (2022-2025).
[Basic policies of the Medium-Term Management Plan (2022-2025)]
We will accelerate the implementation of our IT solutions strategies for different customer groups, and implement the service-type business model to expand the stock business through which we continuously provide services to customers. Increase earnings capacity of existing businesses 2) We will further increase the profitability of the business of Canon products while conducting sales strategies tailored to customer groups. 3) Strengthen specialized areas and create new businesses We will achieve further growth in our industrial equipment business and strive to create new businesses. Group management aimed at continuous growth 4) We will actively invest in improving human resources and seek to establish an engagement improvement cycle that will connect this effort to increasing value offered to customers. In line with this effort, we will speed up our business investments toward continuous growth of the Group. (2022-2025) Progress Report" announced on January 27, 2023.
Status of Assets and Earnings
(4)

number of outstanding shares during the fiscal year.

Main Location of Operations

(7)
Employees

Parent Company and Principal Subsidiaries
(8)

(6)
Overview of Contract, etc., with Parent Company about Important Financial and Business
Policies
The Company has concluded a contract with the Parent Company as the exclusive seller within Japan of all products (excluding semiconductor exposure devices, liquid crystal substrate exposure devices, and medical devices; hereinafter referred to as the "Products") manufactured by the Parent Company (including its subsidiaries and associates) and sold under the Canon brand. Given that the involvement of the Parent Company in the management of the Company is limited to the exercise of voting rights as a shareholder and that none of Canon Inc.’s officers currently serve as officers of the Company, the involvement of the Parent Company in the management of the Company is extremely limited. The Nomination and Remuneration Advisory Committee deliberates to nominate executives and determine their remuneration, and a half of this committee’s members are Independent Outside Directors whom the Company appoints on its own, objectively ensuring transparency and fairness.
Matters about the Transactions with Parent Company, etc.
The Company purchases the Products from the Parent Company. The Company presents preferred prices taking into account market prices, upon which the terms are negotiated and determined. The Company sells consumables for office equipment to the Parent Company. The terms are negotiated and determined after taking into account the Company's cost and market prices. The Company lends funds to the Parent Company by the interest rates determined reasonably taking into account market rates. Thus, the board of directors assesses that the Company is conducting business activities and making management decisions based on the Company's own management judgments, certain independence from the Parent Company is secured, and the Company's profit is not harmed in the transactions with the Parent Company.
Consolidated Status The number of consolidated subsidiaries was 15.
2. Status of Shares of the Company
299,500,000 shares
Total Number of Shares Authorized
(1)

from the total number of issued shares.
(4) Shareholding Ratio by Category

(5)
Shares Issued to Directors and Audit & Supervisory Board Members as Consideration for the
Execution of Their Duties during This Fiscal Year

Note:
Notes: 1.  Directors Mr. Tsuyoshi Osato and Mr. Toshiharu Hasebe and Audit & Supervisory Board Member Mr. Shiro Hamada were appointed at the 54th Ordinary General Meeting of Shareholders held on March 29, 2022 and each of them assumed office. 2. Directors Mr. Akio Dobashi, Mr. Yoshio Osawa and Mr. Toshiharu Hasebe are Outside Directors. 3. Director Mr. Akio Dobashi retired from the position of Outside Director of Maeda Corporation on June 23, 2022. 4. Audit & Supervisory Board Members Mr. Iwao Hashimoto, Mr. Nobutoshi Matsumoto and Mr. Shigeo Hasegawa are Outside Audit & Supervisory Board Members. 5. The Company has notified Directors Mr. Akio Dobashi, Mr. Yoshio Osawa and Mr. Toshiharu Hasebe as independent directors and Audit & Supervisory Board Members Mr. Iwao Hashimoto and Mr. Shigeo Hasegawa as independent Audit & Supervisory Board Members to Tokyo Stock Exchange, Inc. on which the Company is listed as provided under the regulations of Tokyo Stock Exchange, Inc. 6. Mr. Shiro Hamada is an Audit & Supervisory Board Member and has accounting experience in the Company for many years and has a wealth of expertise in finance and accounting. 7. Mr. Nobutoshi Matsumoto is an Audit & Supervisory Board Member and has accounting experience in Canon Inc., our parent company, for many years and has a wealth of expertise in finance and accounting. 8. Mr. Shigeo Hasegawa is an Audit & Supervisory Board Member and qualified as a Certified Public Accountant and has a wealth of expertise in finance and accounting. 9. The Company has entered into contracts, in accordance with the Articles of Incorporation, with the Outside Director and the Audit & Supervisory Board Members to limit their liabilities to compensate damages under Paragraph 1, Article 423 of the Companies Act of Japan, to the limit of amount set forth in the Paragraph 1, Article 425 of the Companies Act of Japan.
(2)
Remuneration for Directors and Audit & Supervisory Board Members for This Fiscal Year
■ Method for Determining the Policy to Determine the Details of the Remuneration of Individual
Directors
The Company established the voluntary "Nomination and Remuneration Advisory Committee" consisting of the President & Representative Director, one Director and two Independent Outside Directors, for the purpose of ensuring the transparency and objectivity of the remuneration determination process and the validity of the remuneration systems. The Committee reviews the validity of the remuneration systems for Directors and Executive Officers in the positions of Vice Presidents or higher, including the standards for the calculation of basic remuneration and bonuses and the standards for granting stock compensation-type stock options, and reports to the Board of the Directors to the effect that the systems were valid. At the Board of Directors meeting held on March 29, 2022, the Board of Directors passed a resolution to adopt the Policy to Determine the Details of the Remuneration of Individual Directors.
■ Matters Concerning the Policy to Determine the Details of Remuneration of Directors and
Audit & Supervisory Board Members
1) Basic Policy on Compensation The Company endeavors to design officer compensation systems that will function as a framework for effectively encouraging officers to fully demonstrate their abilities and fulfill their roles and responsibilities for the Group's sound and sustainable growth. The Company's basic policy is that the proprietary value of officer compensation should be set at an appropriate level, taking into consideration the attraction and retention of talented human resources who can fully meet the Company's expectations. 2) Representative Directors and Executive Directors a. The compensation of Representative Directors and Executive Directors is made up of the following "basic remuneration," "bonus" and "stock compensation-type stock options."
<Basic Remuneration>
Basic remuneration is a fixed amount paid monthly to Representative Directors and Executive Directors, as compensation for the execution of their duties. It is a prescribed amount set in accordance with the position, role, and degree of contribution of Representative Directors and Executive Directors. The total amount must not be more than the amount approved by the General Meeting of Shareholders (However, the amount is the total amount of basic remuneration for all Directors including Outside Directors).
<Bonus>
The bonus is cash remuneration paid annually to Representative Directors and Executive Directors to reward their achievements over the course of one year in office, and it uses consolidated net income before income taxes as an indicator, which is the result of the Group's operating activities over the course of a year. A standard bonus amount set in accordance with the position of Representative Directors and Executive Directors is adjusted according to the degree of achievement of the indicator. Since the Company's view is that bonuses are essentially a distribution of company profits along with dividends and retained earnings, the Company consults the Annual General Meeting of Shareholders for approval of the payment of bonuses and the total amount to be paid calculated in accordance with the foregoing.
<Stock Compensation-type Stock Options>
The purpose of the stock compensation-type stock options is to further motivate officers to improve business performance and enhance corporate value in the medium to long term by sharing both the benefits and risks of fluctuating stock prices with the shareholders, and in doing so, grant stock acquisition rights for the Company's stock to these officers once per year. The total amount of the stock acquisition rights must not be more than the amount approved by the General Meeting of Shareholders. The number of stock acquisition rights to be granted is calculated based on each officer's position and stock price levels at the time of the grant. Under the plan, the exercise price per share for a stock acquisition right shall be one yen. The number of granted stock acquisition rights that may be exercised by such holders is adjusted(range from 0% to 100% of granted) based on the level of consolidated net income before taxes for the fiscal year that stock acquisition rights was granted .When granted stock acquisition rights as stock options, the amount determined based on fair value of stock acquisition rights is recorded as remuneration for eligible officers. As remuneration is linked to achievements made throughout one's term in office, eligible officers shall be allowed to exercise stock acquisition rights at the time of their retirement. In the event that the Company recognizes any misconduct, acts conflicting with the duty of due diligence, or any other act equivalent thereto perpetrated by the grantees, the Company may limit the exercise of all or part of the stock acquisition rights. Given the importance of addressing management from a medium- to long-term perspective, emphasis will be placed on maintaining the levels and stability of basic remuneration while aiming to enhance the financial results for each year. Accordingly, the percentage of the bonus to basic remuneration and the percentage of stock compensation-type stock options to basic remuneration will be a maximum of 30% and 20%, respectively. Outside Directors and Audit & Supervisory Board Members b. The remuneration of Outside Directors and Audit & Supervisory Board Members, who perform duties from a position of independence from business execution, is limited to the basic remuneration, which is a fixed amount of monetary compensation paid each month as consideration for the execution of duties. The compensation of Outside Directors is determined within the limit of the annual amount determined by resolution of the General Meeting of Shareholders stated in a. <Basic Remuneration> above, and within the limit of the amount determined in advance by the Company, taking general levels of compensation into consideration. The remuneration of Audit & Supervisory Board Members is determined through deliberations between Audit & Supervisory Board Members within the annual limit amount determined by resolution of the General Meeting of Shareholders.
3)
Matters Concerning the Delegation of Decisions on the Details of the Remuneration of
Individual Directors
Mr. Masachika Adachi, the President & Representative Director and Executive President, is responsible for determining the individual remuneration amounts of Directors under delegation of authority, based on the remuneration systems that have been reviewed by the Nomination and Remuneration Advisory Committee. The Company delegates this mission to the President & Representative Director and Executive President because he is best positioned to assess the areas each Director is in charge of while maintaining a bird's eye view of the Group's overall results. As the details of the remuneration of individual Directors is determined upon the aforementioned procedure, the Board of Directors considers the details are in line with the determination policy.
who retired from office at the close of the 54th Ordinary General Meeting of Shareholders held on March 29, 2022. 2. When calculating performance-based remuneration, "consolidated net income before income taxes" is used as the indicator for the Company's business performance. That amount is considered to be an appropriate representation of the results of the Group's operating activities for the fiscal year. The calculation method of the amount of performance-based remuneration is as described in "Matters Concerning the Policy to Determine the Details of Remuneration of Directors and Audit & Supervisory Board Members, 2) Details of Each Compensation System, a. Representative Directors and Executive Directors" above. Actual figures for this performance indicator are stated in the Consolidated Statements of Income. 3. Figures for Bonuses indicate the amount of accrued directors' bonuses as of the end of the fiscal year. 4. In stock compensation-type stock options, expenses for this fiscal year are presented in an amount equivalent to the amount of stock acquisition rights granted as stock options. During this fiscal year, 95 units of stock acquisition rights (9,500 shares of common stock) were delivered to four Directors, excluding the Outside Directors. The main conditions for exercise, etc. of the stock acquisition rights are as described in "Matters Concerning the Policy to Determine the Details of Remuneration of Directors and Audit & Supervisory Board Members, 2) Details of Each Compensation System, a. Representative Directors and Executive Directors" above. As a result of the actual figures for the performance indicator "consolidated net income before income taxes" being as stated in the Consolidated Statements of Income, 72 units (7,200 shares of common stock) of the stock acquisition rights are exercisable. 5. At the 39th Ordinary General Meeting of Shareholders held on March 28, 2007, a resolution was passed to set the amount of remuneration for Directors at ¥800 million (hereinafter referred to as the "Annual Remuneration Limit") or less per year. The number of Directors as of the close of the said Ordinary General Meeting of Shareholders was 17. In addition, at the 54th Ordinary General Meeting of Shareholders held on March 29, 2022, a resolution was passed to introduce a stock compensation-type stock options plan, under which the Company grants stock acquisition rights of the Company's stock to eligible Directors (excluding Outside Directors) as officer compensation within the annual remuneration limit. The number of Directors as of the close of the said Ordinary General Meeting of Shareholders was seven, including three Outside Directors. 6. At the 30th Ordinary General Meeting of Shareholders held on March 26, 1998, a resolution was passed to set the amount of remuneration for Audit & Supervisory Board Members at ¥120 million or less per year. The number of Audit & Supervisory Board Members as of the close of the said Ordinary General Meeting of Shareholders was four. (3) The Company has entered into a liability insurance policy for officers defined in Article 430-3, Paragraph 1 of the Companies Act of Japan. The policy covers damages that may arise from the insured assuming liability in connection with their execution of duties or claims filed against them for such liabilities. However, the said insurance policy does not cover damages arising from the insured's unlawful gain or benefit, criminal acts, or acts committed with the knowledge that they violate laws and regulations. The policy insures the Company's Directors and Audit & Supervisory Board Members. The Company pays the premiums for all the insured parties, without any contribution from them.
Status of Outside Director and Outside Audit & Supervisory Board Members
Relation between Important Organization of Concurrent Post and the Company

June 23, 2022. There is no special relation between the Company and Maeda Corporation.

(4)
4. Status of Accounting Auditor
(1) Name of Accounting Auditor Deloitte Touche Tohmatsu LLC
(2)

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 1 of the Certified Public Accountings Act. 3. Reason that the Audit & Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor: The Audit & Supervisory Board has received necessary documents and reports from the Directors, related internal divisions, and the Accounting Auditor, in addition to confirming the audit plan, status of the performed audit for the previous fiscal year, and the estimated remuneration for this fiscal year. As a result, the Audit & Supervisory Board reached an agreement regarding the remuneration to Accounting Auditor, upon judging it to be a rational level for maintaining and improving audit quality.
(3) Policy Regarding Decision on Either Dismissal or Non-Reappointment of the Accounting
Auditor
The Audit & Supervisory Board, by unanimous agreement, as needed, will dismiss the Accounting Auditor when confirmed that the Accounting Auditor falls under any Item of Paragraph 1, Article 340 of the Companies Act. In addition to the above, should anything occur to negatively impact the qualifications or independence of the Accounting Auditor, making it unlikely that the Accounting Auditor will be able to properly perform an audit, the Audit & Supervisory Board will decide the contents of the item to be proposed at a General Meeting of Shareholders regarding the dismissal or non- reappointment of the Accounting Auditor.
5. Policy Regarding Decision of Dividends from Surplus, etc.
The Company made its basis policy, with respect to profit distribution, to pay the dividends based on a consolidated payout ratio of 30% taking into consideration comprehensively the medium-term profit plan, investment plan, and cash flows to be generated. As to the dividends for this fiscal year, the Company plans to pay year-end dividends of 50 yen per share, totaling 90 yen per share (consolidated payout ratio of 32.8%) as a full-year dividends together with the interim dividends (40 yen per share).
6. Stock Acquisition Rights etc. of the Company
■ Stock Acquisition Rights etc. Granted as Compensation for Execution of Duties That Are Held by the Directors of the Company as of the End of This fiscal year 1) Name Stock Acquisition Rights granted in April of 2022 2) Fair value of stock acquition rights     (1 unit is 100 shares) 260,600 yen 3) Exercise Price (per Share) 1 yen 4) Exercise Period April 29, 2022 to April 28, 2052 5) Holder, Number of Holders, Number of Units, and Class and Number of Shares to Be Acquired
6) Main Conditions for the Exercise of Stock Acquisition Rights In principle, In accordance with the provisions of the stock acquisition rights agreement between the (i) Company and a holder of the stock acquisition rights, the number of granted stock acquisition rights that may be exercised by such holders is    adjusted(range from 0% to 100% of granted) based on the level of consolidated net income before taxes for the fiscal year that stock acquisition rights was granted and the holder of the stock acquisition rights shall be entitled to exercise the number of exercisable stock acquisition rights only in a lump sum within a period of 10 days (or the next business day, if the tenth day is a holiday) from the day immediately following the day when they cease to hold any position as Executive Officers who are in the positions of Vice Presidents or higher (including persons serving concurrently as Directors; hereinafter referred to as "Eligible Officers") of the Company, and (ii) in the event that the Company recognizes any acts by the Eligible Officers that are in violation of laws and regulations or misconduct in the course of their duties, acts conflicting with the duty of due diligence or duty of loyalty, or any other act equivalent thereto, or if they are deemed to have resigned without good cause, the Company may limit the number of stock acquisition rights that may be exercised by the said holder of the stock acquisition rights, subject to a resolution of the Board of Directors of the Company. In this case, the said holder of the stock acquisition rights may not exercise stock acquisition rights in a quantity exceeding such limit, and (iii) in addition to the above, the conditions specified in the agreement to be executed between the Company and the holder of the stock acquisition rights shall apply, based on a resolution of the Board of Directors of the Company. (Note)  Holder, Number of Holders, number of units,and class and number of shares to be aquried after
■ Stock Acquisition Rights etc. Granted during This Term to the Executive Officers Who Are in the Positions of Vice Presidents or Higher (Excluding Persons Serving Concurrently as Directors) of the Company as Compensation for Execution of Duties 1) Name Stock Acquisition Rights issued in April of 2022 2) Price to Be Paid In (per Stock Acquisition Right) 260,600 yen 3) Exercise Price (per Share) 1 yen 4) Exercise Period April 29, 2022 to April 28, 2052 5) Grantee, Number of Grantees, Number of Units, and Class and Number of Shares to Be Acquired 105 units 10,500 shares of common stock Vice President 7 persons 6) Main Conditions for the Exercise of Stock Acquisition Rights In principle, In accordance with the provisions of the stock acquisition rights agreement between the (i) Company and a holder of the stock acquisition rights, the number of granted stock acquisition rights that may be exercised by such holders is    adjusted(range from 0% to 100% of granted) based on the level of consolidated net income before taxes for the fiscal year that stock acquisition rights was granted and the holder of the stock acquisition rights shall be entitled to exercise the number of exercisable stock acquisition rights only in a lump sum within a period of 10 days (or the next business day, if the tenth day is a holiday) from the day immediately following the day when they cease to hold any position as Executive Officers who are in the positions of Vice Presidents or higher (including persons serving concurrently as Directors; hereinafter referred to as "Eligible Officers") of the Company, and in the event that the Company recognizes any acts by the Eligible Officers that are in violation (11) of laws and regulations or misconduct in the course of their duties, acts conflicting with the duty of due diligence or duty of loyalty, or any other act equivalent thereto, or if they are deemed to have resigned without good cause, the Company may limit the number of stock acquisition rights that may be exercised by the said holder of the stock acquisition rights, subject to a resolution of the Board of Directors of the Company. In this case, the said holder of the stock acquisition rights may not exercise stock acquisition rights in a quantity exceeding such limit, and (iii) in addition to the above, the conditions specified in the agreement to be executed between the Company and the holder of the stock acquisition rights shall apply, based on a resolution of the Board of Directors of the Company.
7. Systems for Ensuring Appropriateness of Business Operations and Outline of Implementation Activities The content of the resolution of the Board of Directors regarding the systems necessary to ensure the appropriateness of
(Notes on important items forming the basis of consolidated financial statements) 1. Scope of consolidation (1) Consolidated subsidiaries ・・・・・・・ 15 Canon IT Solutions Inc., Canon System & Support Inc., Canon Major consolidated subsidiaries ・・・ Production Printing Systems Inc. (2) Non-consolidated subsidiaries ・・・・・ None 2. Application of equity method (1) Affiliates subject to equity method ・ ・ ・ ・ None (2) Affiliates not subject to equity method ・ ・ ・ None 3. Fiscal years for consolidated subsidiaries The closing date for consolidated subsidiaries is the same as all other consolidated closing dates. 4. Accounting policies (1) Valuation standards and methods for key assets (i) Securities Held-to-maturity securities ・ ・ ・ ・ ・ ・ Amortized cost(straight-line method)

(4) Accounting methods for retirement benefits
(i) Method of aligning estimated retirement benefits ・ ・ ・ ・ ・ ・ Retirement benefit obligations are calculated based on standard benefit calculation formula, to align the estimated amount of retirement benefits with the relevant period as of the end of the current consolidated accounting year. (ii) Method of recording actuarial differences and prior service costs • Prior service costs are generally expensed using the straight-line method based on the average remaining years of service for the relevant employee at the time of incurring costs. Actuarial differences are generally expensed from the following consolidated accounting year, using the straight-line method based on the average remaining years of service for the relevant employee at the time of incurring costs. (iii) Using simplified methods for small companies, etc. • ・・・・・ For selected consolidated subsidiaries, simplified methods are applied in order to calculate retirement benefit liabilities and costs. This entails listing retirement benefit obligations as the amount payable in retirement benefits at the end of the year, based on the relevant company's circumstances.
(5) Standards for recording key revenue and expenses
The details of the main performance obligations in key businesses related to revenue from contracts with the Group's customers and the usual timing at which the Group typically satisfies these performance obligations (when it typically recognizes revenue) are as described below. In addition to sale of Canon products and provision of related services, the Group sells products and provides services in fields such as IT solutions, industrial equipment and healthcare. In the case of sale of a product that does not require inspection by the customer, usually at the time of delivery of the product, the legal title and physical possession of the product and significant risks and economic value associated with the ownership of the product transfer to the customer, and the Group is entitled to receive payment of consideration for the transaction from the customer. Therefore, the Group judges that performance obligations are satisfied by transferring control of the product to the customer at this point of time, and recognizes revenue at the time of the delivery of product. Additionally, in the case of sale of a product that requires inspection by the customer, at the time of completion of inspection by the customer, the legal title and physical possession of the product and significant risks and economic value associated with the ownership of the product transfer to the customer, and the Group is entitled to receive payment of consideration for the transaction from the customer. Therefore, the Group judges that performance obligations are satisfied by transferring control of the product to the customer at this point of time, and recognizes revenue at the time of completion of inspection by the customer. Provision of services consists mainly of business equipment maintenance contracts, which are routine or recurring, and therefore the Group judges that the performance obligations are satisfied over time as services are provided to customers in accordance with the contracts and recognizes revenue equally over a given period based on the terms and conditions of the contract with the customers. In the case of contracts where the Group is entitled to receive consideration from the customer for the portion of the performance obligation satisfied according to product usage, the Group judges that the customer enjoys benefits according to the usage, and recognizes revenue based on an amount multiplied by a unit price stipulated in the contract according to the usage. Furthermore, consideration for transactions is generally settled within a short period of time following the time when performance obligations are satisfied, and the amount of consideration promised does not include a significant financing component. For some of the sale of products and the provision of services, the Group receives consideration for transaction in the form of advance payments. Conditions peculiar to each reporting segment are as described below. The Enterprise segment and the Area segment are combined due to the similarity of the products sold and services provided in these two segments. (Consumers) The transaction price received by the Group in exchange for products sold includes variable considerations such as rebates based on the achievement of a specified milestone or other targets. Variable considerations such as rebates are mainly related to products sold for which the main customer base is retailers. Variable considerations such as rebates are deducted from the transaction price, and rebates are estimated using the expected value method based on actual figures in previous years and other factors.
(Enterprise and Area)
For maintenance and operation services/outsourcing for IT solutions, services are provided to customers in a uniform manner over the contract duration, and therefore the Group judges that the performance obligations are satisfied over time and recognizes revenue equally over a given period based on the terms and conditions of the contract with the customers. In the case of contracts where the Group is entitled to receive consideration from the customer for the portion of the performance obligation satisfied according to factors such as hours, workload, etc., the Group judges that customer enjoys benefits according to the hours and workload involved in the service and recognizes revenue based on an amount multiplied by a unit price stipulated in the contract according to hours, workload, etc. involved in the service. For SI services that provide custom development of software, if reasonable estimates of progress can be made, since deliverables are transferred to the customer as progress is made on development, the Group recognizes revenue over the development period in accordance with the progress of development. The Group judges that costs incurred are proportional to the progress of development and recognizes revenue using the input method based on costs incurred (cost-to-cost method) to estimate progress. Additionally, if reasonable estimates of progress cannot be made, in the case that expenses involved in the amount of progress made are recoverable,  the Group recognizes revenue based on the cost recovery method. (Professional) For SI services that provide custom development of systems in the healthcare field, etc., please refer to the relevant performance obligations detailed in the Enterprise and Area segments. (6) Key hedge accounting methods (i) Hedge accounting method ・ ・ Appropriation accounting is applied to foreign currency denominated payables subject to forward exchange contracts in line with accounting requirements. (ii) Hedging instrument and subject Hedging instrument ・ ・ ・ ・ ・ ・ ・ ・ Forward exchange contracts Subject of hedging • ・・・・・・ Foreign currency denominated payables (iii) Hedging policy ・・・・・・・・・・・・ ・ ・ ・ ・ ・ Measures are taken to hedge against the risk of cash flow fluctuations due to exchange rate fluctuations in the future, in relation to foreseeable foreign currency denominated payables up to a certain amount. (iv) Method of evaluating effectiveness of hedging ・ ・ For forward exchange contracts, the same amount is appropriated on the same date in the same currency, in accordance with the Company's hedging policy. The effectiveness is not evaluated on the date of settlement of accounts because it is guaranteed to correlate with subsequent exchange rate fluctuations. (7) Goodwill Goodwill is amortized over 5 years using straight-line method. (8) Other important items forming the basis of consolidated financial statements (i) Application of the consolidated tax system ・ ・ For itself and selected consolidated subsidiaries, the Company applies the consolidated tax system, with itself as the consolidated tax parent company. (ii) Application of tax effect accounting for the transition from the consolidated tax system to the group tax sharing system • ・・・・・・・・・・・・ With regard to the transition to the group tax sharing system created under the "Act on Partial Revision of the Income Tax Act, etc." (Act No. 8 of 2020) and items for which the non-consolidated taxation system was reviewed in line with the transition to the group tax sharing system, the Company and certain domestic consolidated subsidiaries have not applied the provisions of paragraph 44 of the "Implementation Guidance on Tax Effect Accounting" (ASBJ Guidance No. 28, February 16, 2018) and have recorded the amounts of deferred tax assets and deferred tax liabilities based on the provisions of the tax law before the revision, as allowed in the provisions of paragraph 3 of the "Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System" (PITF No. 39, March 31, 2020). Effective from the beginning of the following fiscal year, the Group plans to apply the "Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System" (PITF No. 42, August 12, 2021) which stipulates the processes of accounting and disclosure for corporate and local income taxes as well as tax effect accounting under the group tax sharing system. (Notes on changes in accounting policies) (Application of Accounting Standard for Fair Value Measurement, Implementation Guidance on Accounting Standard for Fair Value Measurement and other related standards) The Group has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019; hereinafter "Fair Value Measurement Standard") and other standards from the beginning of the current fiscal year, and will prospectively apply the new accounting policies stipulated by the Fair Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). There is no impact on the consolidated financial statements. In addition, the Group will include notes on fair value information by level within the fair value hierarchy in the "Notes on financial instruments." (Notes on changes in presentation method) (Application of Accounting Standard for Revenue Recognition and Implementation Guidance on Accounting Standard for Revenue Recognition) The Group has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; hereinafter "Revenue Recognition Standard") from the beginning of the current fiscal year. Due to the application of the Revenue Recognition Standard, etc., "Notes and accounts receivable-trade," which was presented under "Current assets" in the consolidated balance sheet of the previous fiscal year, has been included under "Notes, accounts receivable-trade and contract assets" from the current fiscal year. (Notes on accounting estimates) Recoverability of deferred tax assets
2. Other information for the understanding of the details of accounting estimates The Group estimates the deferred tax assets amounts for future temporary differences for which the timing of realization is reasonably estimated. This is because stable taxable income has been achieved during the current fiscal year, and the Group forecasts as of the end of the current fiscal year that the subsequent business environment is unlikely to significantly change in the near future. The Company and selected domestic consolidated subsidiaries apply the consolidated tax system and carry out tax allocation for the application of the consolidated tax system. The Group considers the estimated future taxable income and business environment to be appropriate as they are determined based on the best estimate and judgement by management. However, they may be affected by changes in future business plans and economic environment as well as revision and promulgation of related laws and regulations. If any need arises for reviews regarding estimated future taxable income and business environment, the amount to be recognized in the consolidated financial statements for the following fiscal year may be affected. (Notes on consolidated balance sheets) 1. Accumulated depreciation on property, plant and equipment 75,514 million yen 2. Guarantee liabilities Guarantees for employees' housing loans 3 million yen 3. The balances of receivables from contracts with customers and contract assets, respectively, are as follows. Notes receivable-trade 11,053 million yen Accounts receivable-trade 86,219 million yen Contract assets 11,940 million yen 4. The balance of contract liabilities included in "Other current liabilities" under current liabilities 17,639 million yen (Notes on consolidated statements of income) Amount of revenue from contracts with customers included in net sales 580,964 million yen (Notes on consolidated statements of shareholders' equity) 1. Class and total number of issued shares as of end of current fiscal year Common share 131,079,972 shares
4. Number of shares subject to stock acquisition rights issued by the Company as of the end of the current fiscal year Common share 11,175 shares (Notes on financial instruments) 1. Status of financial instruments (1) Policies for financial instruments As the Group, we limit asset management to financial instruments characterized as very safe, and believe that financing should mainly be conducted through the use of group funds whenever necessary. We enter into derivative transactions to hedge against foreign exchange fluctuation risks, but have a policy of not engaging in speculative transactions.
(2) Details of financial instruments, risks, and systems to control risks
Operating receivables, consisting of notes and accounts receivable, are exposed to customer credit risks. We aim to mitigate such risks through strict credit control, based on credit data provided by external credit agencies, and through credit insurance and other risk-hedging measures. Short-term loans receivable are mainly loans to the parent company, provided in accordance with internal regulations on investment and management of funds. Securities and investments in securities consist primarily of held-to-maturity debt securities and shares in companies with business ties to the Group, and are exposed to market price fluctuation risks. To counter such risks, we regularly monitor fair values and the financial condition of companies issuing shares (business counterparties). For securities other than held-to-maturity debt securities, we continuously review the status of our holdings, taking into consideration market conditions and relationships with business counterparties. Trade payables, consisting of notes and accounts payable, are mainly those due within 6 months. Derivative transactions consist of forward exchange contracts to hedge against the risk of fluctuations in foreign currency denominated trade payables. With regard to hedge accounting, notes on important items forming the basis for compiling the aforementioned consolidated accounting documents are outlined under "4. Accounting policies (6) Key hedge accounting methods." (3) Supplementary explanation of fair values of financial instruments Fair values of financial instruments include not only values based on market quotations, but also values calculated on a theoretical basis in cases where market quotations are not available. Values may vary depending on different assumptions, due to the fact that variables are factored into the calculation of such values.
2. Fair values of financial instruments
Book values on consolidated balance sheets as of December 31, 2022, their corresponding fair values, and the
accounts payable-trade are omitted, because they are comprised of cash and are to be settled in the short term, meaning that their fair values approximate their book values. As unlisted shares do not have a market value and funds from investment partnerships are not subject to fair *2. value disclosure in accordance with paragraph 27 of the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, July 4, 2019), unlisted shares and funds from investment partnerships (book value on consolidated balance sheets: 2,425 million yen) are not included in "(1) Investments in securities" above. *3. Represent net of receivable and payable and negative means net payable.
3. Fair value input hierarchy
Input for financial instruments is classified into the following three levels according to the observability and materiality used to measure fair value. Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities Level 2: Inputs other than Level 1 inputs that are observable directly or indirectly Level 3: Significant inputs are unobservable If significant multiple imputs are used to fair value mesurement, the fair value measurement is categorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
Investments in securities Fair values of shares are based on prices at listed security exchanges.  As shares are traded in active markets, their inputs is classified as Level 1.
The fair value of forward exchange contracts is calculated based on quotations obtained from counterparty financial institutions and is classified as Level 2. (Notes on rented and other real estate) Not disclosed due to immaterial.
(Notes on revenue recognition)
1. Disaggregation of revenue from contracts with customers
businesses.
2. Useful information in understanding revenue
Useful information in understanding revenue is as presented in "(Notes on important items forming the basis of consolidated financial statements), 4. Accounting policies, (5) Standards for recording key revenue and expenses." 3. Information for understanding revenue for the current and subsequent fiscal years (1) Contract asset and contract liability balances
custom development of software, for which performance obligations have been satisfied in part or in full, but an invoice has not yet been issued as of the last day of the fiscal year. Once the Group has an unconditional right to consideration, it reclassifies contract assets to receivables from contracts with customers. Contract liabilities primarily relate to advances received from customers as payment for products or payment for unfulfilled services in the case of services that are continuously provided. Contract liabilities are reversed upon recognition of revenue. The amount of revenue recognized for this fiscal year that was included in contract liabilities at beginning of this fiscal year was    10,469million yen. The amount of revenue recognized from performance obligations satisfied(or partially satisfied) in previous fiscal years was immaterial. (2) Transaction price allocated to the remaining performance obligations The Group has applied the practical expedient to the notes on transaction prices allocated to the remaining performance obligations, and does not disclose contracts with an original expected duration of one year or less. The revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of this fiscal end was as follows.
based on an amount multiplied by a unit price stipulated in the contract according to usage are not disclosed. (Notes on information per share) 1. Net assets per share 2. Net income attributable to owners of parent per share 3,081.07 yen 274.16 yen (Notes on significant subsequent events) Not applicable.

4. Standards for recording revenue and expenses
The details of the main performance obligations in key businesses related to revenue from contracts with the Company's customers and the usual timing at which the Company typically satisfies these performance obligations (when it typically recognizes revenue) are as described below. In addition to sale of Canon products and provision of related services, the Company sells products and provides services in fields such as IT solutions and industrial equipment. In the case of sale of a product that does not require inspection by the customer, usually at the time of delivery of the product, the legal title and physical possession of the product and significant risks and economic value associated with the ownership of the product transfer to the customer, and the Company is entitled to receive payment of consideration for the transaction from the customer. Therefore, the Company judges that performance obligations are satisfied by transferring control of the product to the customer at this point of time, and recognizes revenue at the time of the delivery of product. Additionally, in the case of sale of a product that requires inspection by the customer, at the time of completion of inspection by the customer, the legal title and physical possession of the product and significant risks and economic value associated with the ownership of the product transfer to the customer, and the Company is entitled to receive payment of consideration for the transaction from the customer. Therefore, the Company judges that performance obligations are satisfied by transferring control of the product to the customer at this point of time, and recognizes revenue at the time of completion of inspection by the customer. Provision of services consists mainly of business equipment maintenance contracts, which are routine or recurring, and therefore the Company judges that the performance obligations are satisfied over time as services are provided to customers in accordance with the contracts and recognizes revenue equally over a given period based on the terms and conditions of the contract with the customers. In the case of contracts where the Company is entitled to receive consideration from the customer for the portion of the performance obligation satisfied according to product usage, the Company judges that the customer enjoys benefits according to the usage, and recognizes revenue based on an amount multiplied by a unit price stipulated in the contract according to the usage. Furthermore, consideration for transactions is generally settled within a short period of time following the time when performance obligations are satisfied, and the amount of consideration promised does not include a significant financing component. For some of the sale of products and the provision of services, the Company receives consideration for transaction in the form of advance payments. Conditions peculiar to each reporting segment are as described below. The Enterprise segment and the Area segment are combined due to the similarity of the products sold and services provided in these two segments. (Consumers) The transaction price received by the Company in exchange for products sold includes variable considerations such as rebates based on the achievement of a specified milestone or other targets. Variable considerations such as rebates are mainly related to products sold for which the main customer base is retailers. Variable considerations such as rebates are deducted from the transaction price, and rebates are estimated using the expected value method based on actual figures in previous years and other factors. (Enterprise and Area) For maintenance and operation services/outsourcing for IT solutions, services are provided to customers in a uniform manner over the contract duration, and therefore the Company judges that the performance obligations are satisfied over time and recognizes revenue equally over a given period based on the terms and conditions of the contract with the customers. In the case of contracts where the Company is entitled to receive consideration from the customer for the portion of the performance obligation satisfied according to factors such as hours, workload, etc., the Company judges that customer enjoys benefits according to the hours and workload involved in the service and recognizes revenue based on an amount multiplied by a unit price stipulated in the contract according to hours, workload, etc. involved in the service. For SI services that provide custom development of software, if reasonable estimates of progress can be made, since deliverables are transferred to the customer as progress is made on development, the Company recognizes revenue over the development period in accordance with the progress of development. The Company judges that costs incurred are proportional to the progress of development and recognizes revenue using the input method based on costs incurred (cost-to-cost method) to estimate progress. Additionally, if reasonable estimates of progress cannot be made, in the case that expenses involved in the amount of progress made are recoverable, the Company recognizes revenue based on the cost recovery method.
6. Other important items forming the basis of financial statements (1) Application of the consolidated tax system ・ ・ (2) Retirement benefit accounting ・・・・・・
(3) Application of tax effect accounting for the transition from the consolidated tax system to the group tax sharing system・・・・・・・・・・・・ With regard to the transition to the group tax sharing system created under the "Act on Partial Revision of the Income Tax Act, etc." (Act No. 8 of 2020) and items for which the non-consolidated taxation system was reviewed in line with the transition to the group tax sharing system, the Company has not applied the provisions of paragraph 44 of the "Implementation Guidance on Tax Effect Accounting" (ASBJ Guidance No. 28, February 16, 2018) and has recorded the amounts of deferred tax assets and deferred tax liabilities based on the provisions of the tax law before the revision, as allowed in the provisions of paragraph 3 of the "Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System" (PITF No. 39, March 31, 2020). Effective from the beginning of the following fiscal year, the Company plans to apply the "Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System" (PITF No. 42, August 12, 2021) which stipulates the processes of accounting and disclosure for corporate and local income taxes as well as tax effect accounting under the group tax sharing system. (Notes on changes in accounting policies) (Application of Accounting Standard for Fair Value Measurement, Implementation Guidance on Accounting Standard for Fair Value Measurement and other related standards) The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019; hereinafter "Fair Value Measurement Standard") and other standards from the beginning of the current fiscal year, and will prospectively apply the new accounting policies stipulated by the Fair Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). There is no impact on the financial statements. (Notes on changes in presentation method) (Application of Accounting Standard for Revenue Recognition and Implementation Guidance on Accounting Standard for Revenue Recognition) The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; hereinafter "Revenue Recognition Standard") from the beginning of the current fiscal year. Due to the application of the Revenue Recognition Standard, etc., "Notes receivable-trade," "Electronically recorded monetary claims - operating," and "Accounts receivable-trade," which were presented under "Current assets" in the balance sheet of the previous fiscal year, have been included under "Notes receivable-trade," "Electronically recorded monetary claims - operating," "Accounts receivable-trade," and "Contract assets" from the current fiscal year, and "Advances received," which was presented under "Current liabilities," has been included under "Contract liabilities" from the current fiscal year. (Notes on accounting estimates) Recoverability of deferred tax assets
2. Other information that contributes to the understanding of the details of accounting estimates Information is omitted as the same information is provided in Notes to Consolidated Financial Statements. (Notes on balance sheets)
(Notes on statements of income)
(Notes on statements of shareholders' equity) Class and total of treasury stock owned as of end of current fiscal year Common share 1,403,572 shares (Notes on tax allocation) Breakdown of main causes of deferred tax assets and liabilities
(Notes on transactions with related parties)
payables include consumption tax, etc. Terms of transactions and policy for determining terms, etc. (*1) When purchasing merchandise, the Company sets out its preferred price, taking into account market prices, and then enters into price negotiations to determine a final price. (*2) When selling consumables for office equipment, the Company takes into account market prices and its cost, etc., and then enters into price negotiations to determine a final price. (*3) When lending funds, a reasonable loan rate is determined by taking into account market rates. There is no provision for security.
payables include consumption tax, etc. Terms of transactions and policy for determining terms, etc. (*1) When making payment of service charges for office equipment, prices are determined through negotiation, based on the price calculated by the Company. (*2) When selling office equipment and its consumables, prices are determined through negotiation, based on the price calculated by the Company. (*3) When lending funds, a reasonable loan rate is determined by taking into account market rates. There is no provision for security.
(Notes on revenue recognition)
Useful information in understanding revenue Useful information in understanding revenue is as presented in "(Notes regarding key accounting policies), 4. Standards for recording revenue and expenses." (Notes on information per share) 1. Net assets per share 2. Net income per share 2,693.11 yen 260.41 yen (Notes on significant subsequent events) Not applicable.
AUDIT REPORT OF ACCOUNTING AUDITOR ON CONSOLIDATED FINANCIAL STATEMENTS (TRANSLATION) Report of Independent Auditors February 8, 2023 The Board of Directors Canon Marketing Japan Inc.
Opinion Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement of income, the consolidated statement of shareholders' equity and the notes to the consolidated financial statements of Canon Marketing Japan Inc. (the "Company") for the fiscal year from January 1, 2022 through December 31, 2022. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results of operations of Canon Marketing Japan Inc., which consists of the Company and its consolidated subsidiaries, for the period covered by the consolidated financial statements in conformity with accounting principles generally accepted in Japan. Basis for the Opinion We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing standards is stated in "Auditor's Responsibility for the Audit of the Consolidated Financial Statements." We are independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Other Information Other information comprises the information included in the Business Report and the accompanying supplemental schedules. Management is responsible for preparing and disclosing the other information. Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the establishment and operation of the reporting process for the other information. Our opinion on the consolidated financial statements does not cover the other information and we do not intend to express any form of opinions thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and the Audit & Supervisory Board Members and the Audit & Supervisory Board for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for 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. In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare the consolidated financial statements in accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with accounting principles generally accepted in Japan. The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible for monitoring the execution of Directors' duties related to designing and operating the financial reporting process. Auditor's Responsibility for the Audit of the Consolidated Financial Statements Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to express an opinion on the consolidated financial statements from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of the consolidated financial statements. We make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, and perform the following while maintaining professional skepticism. • Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures to address the risks of material misstatement. The audit procedures shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion. • In making those risk assessments, the auditor considers internal control relevant to the entity's audit in order to design audit procedures that are appropriate in the circumstances, although the purpose of the audit of the consolidated financial statements is not to express an opinion on the effectiveness of the entity's internal control. Assess the appropriateness of accounting policies adopted by management and the method of their application, as well as the reasonableness of accounting estimates made by management and the adequacy of related notes. • Determine whether it is appropriate for management to prepare the consolidated financial statements on the premise of a going concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes to the consolidated financial statements in the audit report, or if the notes to the consolidated financial statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the consolidated financial statements. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable to continue as a going concern. • Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordance with accounting principles generally accepted in Japan, assess the presentation, structure, and content of the consolidated financial statements including related notes, and whether the consolidated financial statements fairly present the transactions and accounting events on which they are based. • Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, and is solely responsible for the audit opinion. The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope and timing of implementation of the planned audit, material audit findings including material weaknesses in internal control identified in the course of the audit, and other matters required under the auditing standards. The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the observance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor's independence and any safeguards that are in place to reduce or eliminate obstacles. Interest Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

February 8, 2023
The Board of Directors Canon Marketing Japan Inc.
Opinion Pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying financial statements, which comprise the balance sheet, the statement of income, the statement of shareholders' equity and the related notes, and the accompanying supplementary schedules of Canon Marketing Japan Inc. (the "Company") for the 55th fiscal year from January 1, 2022 through December 31, 2022. In our opinion, the financial statements and the accompanying supplementary schedules referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in Japan. Basis for the Opinion We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing standards is stated in "Auditor's Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules." We are independent of the Company in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Other Information Other information comprises the information included in the Business Report and the accompanying supplemental schedules. Management is responsible for preparing and disclosing the other information. Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the establishment and operation of the reporting process for the other information. Our opinion on the non-consolidated financial statements does not cover the other information and we do not intend to express any form of opinions thereon. In connection with our audit of the non-consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the non-consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and the Audit & Supervisory Board Members and the Audit & Supervisory Board for the Financial Statements and the Accompanying Supplementary Schedules Management is responsible for the preparation and fair presentation of the financial statements and the accompanying supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation and fair presentation of the financial statements and the accompanying supplementary schedules that are free from material misstatement, whether due to fraud or error. In preparing the financial statements and the accompanying supplementary schedules, management is responsible for assessing whether it is appropriate to prepare the financial statements and the accompanying supplementary schedules in accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with accounting principles generally accepted in Japan. The Audit & Supervisory Board Members and the Audit & Supervisory Board is responsible for monitoring the execution of Directors' duties related to designing and operating the financial reporting process. Auditor's Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, and to express an opinion on the financial statements and the accompanying supplementary schedules from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of the financial statements and the accompanying supplementary schedules. We make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, and perform the following while maintaining professional skepticism. • Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures to address the risks of material misstatement. The audit procedures shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion. • In making those risk assessments, the auditor considers internal control relevant to the entity's audit in order to design audit procedures that are appropriate in the circumstances, although the purpose of the audit of the financial statements and the accompanying supplementary schedules is not to express an opinion on the effectiveness of the entity's internal control. • Assess the appropriateness of accounting policies adopted by management and the method of their application, as well as the reasonableness of accounting estimates made by management and the adequacy of related notes. • Determine whether it is appropriate for management to prepare the financial statements and the accompanying supplementary schedules on the premise of a going concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes to the financial statements and the accompanying supplementary schedules in the audit report, or if the notes to the financial statements and the accompanying supplementary schedules pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the financial statements and the accompanying supplementary schedules. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable to continue as a going concern. Besides assessing whether the presentation of and notes to the financial statements and the accompanying supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess the presentation, structure, and content of the financial statements and the accompanying supplementary schedules including related notes, and whether the financial statements and the accompanying supplementary schedules fairly present the transactions and accounting events on which they are based. The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope and timing of implementation of the planned audit, material audit findings including material weaknesses in internal control identified in the course of the audit, and other matters required under the auditing standards. The auditor reports to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the observance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor's independence and any safeguards that are in place to reduce or eliminate obstacles. Interest Our firm and engagement partners have no interests in the Company requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

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 55th fiscal year from January 1, 2022 to December 31, 2022, and reports as follows. Methods and Substance of Audit by Audit & Supervisory Board Members and Audit & Supervisory 1. Board We decided on the auditing policies and the allocation of work duties, etc., received a report on the (1) 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. While confirming to the auditing standards as decided by us, the auditing policies and the allocation of (2) duties, etc., each Audit & Supervisory Board Member endeavored to facilitate mutual understanding with the Directors, the internal audit office and other employees, etc. to collect information and improve the auditing environment. Our audit procedures were as follows. We attended the meetings of the Board of Directors and other important meetings, received reports on i) the status of the work executed from the Directors and the employees and requested their explanations as necessary, inspected material internal decision-making documents, etc., and investigated the status of the operations and assets of the headquarters and major 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. The following systems (Internal Control System) were determined by a Board of Directors' 11) 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 the necessary 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 (the balance sheets, the statements of income, the statements of shareholders' equity and the notes to the non-consolidated financial statements) and their supplementary schedules as well as the consolidated financial statements for the relevant fiscal year (the consolidated balance sheets, the consolidated statements of income, the consolidated statements of shareholders' equity and the notes to the consolidated financial statements). Results of Audit 2. Results of examination of the Business Report, etc. (1) In our opinion, the business report and its supplementary schedules conformity with the applicable laws a) and regulations of Japan and the Articles of Incorporation of the Company and fairly present the state of the Company's affairs; We have found no misconduct or material fact constituting a violation of any applicable laws and b) regulations of Japan or the Articles of Incorporations in connection with the Directors' performance of their duties; and In our opinion, the substance of the decisions made by the Board of Directors with regard to the c) 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; and With respect to the transactions with the Parent Company, etc. that are described in this Business Report, d) we have found no matters that require noting with regard to the matters considered by Board of Directors and the Board of Directors' assessment and factors that might be adverse to the Company's interests. Results of examination of the financial statements and their supplementary schedules (2) In our opinion, the auditing methods used and the conclusions reached by the Accounting Auditor, Deloitte Touche Tohmatsu LLC, are appropriate. Results of examination of the consolidated financial statements (3) In our opinion, the auditing methods used and the conclusions reached by the Independent Auditor, Deloitte Touche Tohmatsu LLC, are appropriate. February 8, 2023 Audit & Supervisory Board, Canon Marketing Japan Inc. Audit & Supervisory Board Member (full time) Audit & Supervisory Board Member (full time) Audit & Supervisory Board Member (full time) (Outside Audit & Supervisory Board Member) Audit & Supervisory Board Member (full time) (Outside Audit & Supervisory Board Member) Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member) Shiro Hamada Masatoshi Tanise Iwao Hashimoto Nobutoshi Matsumoto Shigeo Hasegawa