##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION    FORM 20-F/A  (   )
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR(X)
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR(   )
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-12131 CANON KABUSHIKI KAISHA  CANON INC.  JAPAN
(Jurisdiction of incorporation or organization) 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan
(Address of principal executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class
    
    Name of each exchange on which registered(1) Common Stock (the shares)
    
    New York Stock Exchange(2) American Depositary Shares (ADSs), each of
which represents one share
    
    New York Stock Exchange
 Securities registered or to be registered pursuant to Section 12(g) of the Act. None
(Title of Class)   Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act.
None
(Title of Class)   * American Depositary Receipts for 50,000,000 American Depositary Shares,
each American Depositary Share representing 1 share of common stock of
Canon Inc., were registered under the Securities Act of 1933. Indicate the number of outstanding shares of each of the issuers classes
of capital or common stock as of the close of the period covered by the
annual report. As of December 31, 2003, 881,338,645 shares of common stock, including 27,717,736
ADSs, were outstanding. Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X                    No Indicate by check mark which financial statement item the registrant has
elected to follow. Item 17 X                    Item 18




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TABLE OF CONTENTS Page numberExplanatory Note
    
    
    1Item 4. Information on the Company
    
    
    2A. History and development of the Company
    
    
    2B. Business overview
    
    
    3Products
    
    
    3Marketing and distribution
    
    
    5Service
    
    
    5Net sales by product group and geographic area
    
    
    6Seasonality
    
    
    6Sources of supply
    
    
    6Competition
    
    
    7Patents and licenses
    
    
    8Environmental regulations
    
    
    8C. Organizational structure
    
    
    10D. Property, plants and equipment
    
    
    11Item 6. Directors, Senior Management and Employees
    
    
    14A. Directors and senior management
    
    
    14B. Compensation
    
    
    18C. Board practices
    
    
    18D. Employees
    
    
    19E. Share ownership
    
    
    20SIGNATURES
    
    
    21EXHIBIT INDEX
    
    
    22EX-12 302 CERTIFICATIONEX-13 906 CERTIFICATION




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EXPLANATORY NOTE On June 10, 2004, Canon Inc. (the Company) filed an annual report for the fiscal year ended
December 31, 2003 on Form 20-F with the United States Securities and Exchange Commission (the
SEC). The Company is filing this Form 20-F/A in order to correct certain typographical errors
that were included in such Form 20-F filing as noted below: Item 4B. (Business Overview) In Patent and licenses, the paragraph describing licenses that have been granted by Canon
with respect to its patents is amended as follows: (page 15)   
    
    The list of examples is amended by deleting Konica Corporation
(electrophotography), because license granted to Konica Corporation
(electrophotography) had expired as of the date of the balance sheet
(December 31, 2003). Item 6A. (Directors and senior management) In the list of directors and corporate auditors of the Company as of March 31, 2004, the date
of the commencement of business experience for two directors is amended as follows:  
    
    The date of commencement for Mr. Tsuruokas appointment as President of Canon Deutschland GmbH is amended from 10/1997 to 9/1997. (Page
39)
    
    The date of commencement for Mr. Adachis appointment as
President of Canon (China) Co., Ltd. is amended from 4/2003 to 4/2001. (Page 40) 1




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Item 4.   Information on the Company 
 A.   History and development of the Company Canon Inc. is a joint stock corporation (kabushiki kaisha) formed under
Japanese Commercial Code. Its principal place of business is at 30-2,
Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan. The telephone number is
+81-3-3758-2111. The Company was incorporated under the laws of Japan on August 10, 1937 to
produce and sell Japans first focal plane shutter 35mm still camera, which was
developed by its predecessor company, Precision Optical Research Laboratories,
which was organized in 1933. In the late 1950s, Canon entered the business machines field utilizing
technology obtained through the development of photographic and optical
products. With the successful introduction of electronic calculators in 1964,
Canon continued to expand its operations to include plain paper copying
machines, faxes, laser beam printers, bubble jet printers, computers, video
camcorders and digital cameras.  The following are important events in the development of Canons business
in recent years.  
    
    In 1999, Canon and Toshiba Corporation agreed to collaborate on
developing and establishing mass-production technologies for SEDs
(surface-conduction electron-emitter displays) with potential in
large-screen wall-mounted displays.
    
    In 1999, Oita Canon Materials Inc. was established in Oita, Japan as
an integrated production site for chemical products for business machines.
    
    In 1999, the Canon Inc. Ayase Office was established in Kanagawa,
Japan with the goal of reinforcing the R&D structure for
semiconductor-related devices.
    
    In 2000, the Canon Inc. Optics R&D Center, an R&D facility for
optical technology, was established in Tochigi, Japan.
    
    In 2000, Canon Inc. changed the listing of its American Depository
Receipts (ADRs) to the New York Stock Exchange (NYSE) from the Nasdaq
National Markets.
    
    In 2001, Canon Vietnam Co., Ltd. was established in Hanoi, Vietnam as
a production site for bubble jet printers.
    
    In 2001, Canon Zhongshan Business Machines Co., Ltd. was established
in Zhongshan, China as a production site for laser beam printers.
China.
    
    In 2001, Canon (Suzhou) Inc. was established in Suzhou, China as a
production site for digital copying machines and digital multifunction devices.
    
    In January 2003, Canon Aptex Inc. and Copyer Co., Ltd., two of Canon
Inc.s manufacturing subsidiaries in Japan, formally merged to become
Canon Finetech Inc. The merger was conducted with the aim of
concentrating and further strengthening the core competencies of the two
merged companies in office equipment-related technologies.
    
    In April 2003, Fukushima Canon Inc. was established as a wholly-owned
subsidiary through the spin-off of Fukushima Plant, with the aim of high
value-added manufacturing company equipped with product-launching
capability.
    
    In April 2003, Canon N.T.C.s marketing operations spun off and merged
with Canon System & Support Inc., and its real estate operations spun
off into Canon Facility Management, Inc. Following the corporate
spin-offs, Canon N.T.C.s operations will focus on development and
manufacturing. On January 1, 2004, Canon Precision Inc. (Canon Precision), a
wholly-owned subsidiary of Canon Inc., merged with Hirosaki Precision, Inc.
(Hirosaki Precision), a wholly-owned subsidiary of Canon Precision. Hirosaki
Precision was merged into Canon Precision, the surviving company. Canon
Precision targets the improved efficiency and specialization of business
operations. Since both Canon Precision and Hirosaki Precision were consolidated
subsidiaries of Canon Inc., the merger has no impact on Canons current or
future business results. On January 1, 2004, Canon N.T.C., Inc. (Canon N.T.C.), a wholly-owned
subsidiary of Canon Inc., spun off its environmental business operations into a
newly established company, named Canon Ecology Industry Inc. Following the
separation, Canon N.T.C. focused its energies on its semiconductor
equipment-related business and was renamed Canon Semiconductor Equipment Inc.
The spin-off was intended to improve efficiency and the specialization of
business operations while facilitating the pursuit of independent businesses,
consistent with Canons Excellent Global Corporation Plan. In fiscal 2003, 2002 and 2001, Canons capital expenditures were Yen
210,038 million, Yen 198,702 million and Yen 207,674 million, respectively. In
2003, major capital expenditure were for investments in tools and dies, but
also included were investments for the relocation of the corporate headquarters
office of Canon Sales Co. Inc. and the facilities for production of the
semiconductor production equipment in Japan. For the fiscal 2004, Canon projects that its capital expenditures will
amount to approximately Yen 300,000 million. This amount is expected to be
spent on such expenditures for the establishment of new production engineering
base and new research and development base. Canon anticipates that funds needed
to fulfill these capital expenditures will be generated internally through
operations. 2




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B.   Business overview Canon is one of the worlds leading manufacturers of plain paper copying
machines, digital multifunction devices, or MFDs, laser beam
printers, inkjet printers, cameras and steppers. Canon sells its products principally under the Canon brand name and
through sales subsidiaries. Each of these subsidiaries is responsible for
marketing and distribution to retail dealers in an assigned territory.
Approximately 73% of consolidated net sales in fiscal 2003 were generated
outside Japan; approximately 33% in the Americas, 30% in Europe and 10% in
other areas including Asia. Canons strategy is to develop innovative, high value-added products which
incorporate advanced technologies. Canons research and development activities range from basic research to
product-oriented research directed at keeping and increasing the technological
leadership of Canons products in the market. Canon manufactures the majority of its products in Japan, but in an effort
to reduce currency exchange risks and production cost, Canon has increased
overseas production and the use of local parts. Canon has manufacturing
subsidiaries in the United States, Germany, France, Taiwan, China, Malaysia,
Thailand and Vietnam, and a manufacturing joint venture in Korea. As a concerned member of the world community, Canon emphasizes recycling,
and has increased its use of clean energy sources and cleaner manufacturing
processes. Canon has also adopted programs to collect and recycle used
cartridges and to refurbish used copy machines. In addition, Canon has
completely removed environmentally unfriendly chemicals from its manufacturing
processes. 
 Products Canons products are divided into the following three product groups:
business machines, cameras, and optical and other products. -Business machines- The business machines product group is divided into three sub-groups
consisting of office imaging products, computer peripherals and business
information systems. Office imaging products Canon manufactures, markets and services a wide range of office network
digital MFDs, color network digital MFDs, office copying machines,
personal-use copying machines and full-color copying machines. The office-use market is subject to rapid change, and in fiscal 2003,
customer preferences has shifted from copying machines to digital MFDs, as well
as from monochrome to color products. To respond to these trends, Canon has
been strengthening its lineup of digital MFDs in the imageRUNNER (iR) series,
which have versatile functions, such as copying, printing, scanning, faxing and
data-sharing functions on the Internet and intranets. Canon is also marketing
diverse expansion modules, software and business solutions to increase customer
value. For the development of MFDs, Canon makes effective use of wide range of
technologies from the fields of optics, mechatronics, electronic photo
processing, chemical materials and image processing. Canons MFDs are
differentiated chiefly by the use of leading-edge System On a Chip technology
in the imageRUNNER controller, which acts as the brains of networked MFDs.
The controller provides easy integration with customers IT environments
together with speedy, high-quality image processing. This boosts office
productivity, thereby garnering acclaim from business customers. Canon also
introduced new MFD models throughout fiscal 2003, including the Color
imageRUNNER C3200 (iR C3200), the first color offerings in the imageRUNNER
series, which achieved healthy sales. Canon has a powerful line of full-color copying machines and color digital
MFDs for users ranging from professional graphic designers to business offices.
The trend in printing industry is gradually moving away from large-lot printing
using expensive machinery to small-lot printing on demand and personalized
printing. Canons high-end MFDs and color digital MFDs can be applied to the
print on demand market. In addition, Canon aims to respond to the growing
demand for color imaging for business needs with products using its renowned S
Toner, featuring spherical particles and a microscopic wax-based structure, and
our oil-less fixing engine. Canon has dominant market share in monochrome copying machines for
personal use. Demand for analog products is continuing in Asia, Russia and
Eastern Europe. Canon also introduced digital products in the Americas and in
Europe in response to the shift in demand toward digital products. The office imaging products category also includes the related sales of
paper and chemicals, service charges and sales of replacement parts. Computer peripherals Computer peripherals include laser beam printers, inkjet printers and
scanners. Developed and fostered by Canon, laser beam printers are standard output
peripherals for offices. Canons laser beam printers are relatively small in
size and have high-quality printing capabilities attributable to Canons
expertise in laser beam printing and plain paper copying technologies. Canons
adoption of a user-replaceable toner cartridge system containing optical
components makes its laser beam printers easy to maintain. Most of Canon laser
beam printer sales are on an OEM basis. Canon also distributes Canon brand
laser beam printers in Japan, Europe and Oceania. 3




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As the inventor of bubble jet printing technology, Canon believes it
continues to provide customers with the best performance the technology has to
offer. Canon provides high-performance and high value added models both in
single-function printers and multi-function printers. In response to heated
competition in
the inkjet printer segment, Canon launched several new models in fiscal
2003. Particularly noteworthy were the bubble jet printers supporting the
PictBridge digital camera-printer communications standard, which were released
in the second half of the year. These new models incorporated New MicroFine
Droplet Technology, which has boosted image quality and print speed over those
offered on previous models. The keys to a successful printer are speed, image
quality and paper handling capabilities. Although ranked high among the leaders
in all three categories, Canon has targeted each category for improvements.
Additionally, the PictBridge system has been marked for enhancement, and future
printers will offer even stronger integration with digital cameras. Canon markets a wide variety of products for a spectrum of user needs,
including image scanners in CanoScan LiDE series using Contact Image Sensor,
scanners with charge-coupled devices for high resolution that can also scan
film in the CanoScan series, and film scanners that handle both 35 mm film and
advanced photo system cartridge. Canon has deployed its expertise to develop
space-saving, energy-efficient scanners, as well as easy PC connection via
universal serial bus interface. However, since peaking in 2000, the scanner
market has continued to shrink at a rate of 10% to 20% per year. Under the
prevailing highly competitive conditions, it is necessary for Canon to attain a
high market share. To achieve that goal, Canon has successfully introduced
several new scanner models. Business information systems Business information systems primarily consist of micrographic equipment,
personal computers, calculators, document scanners and work stations. With the movement toward digitalization, the need to scan documents into
text data or image data is expanding. Canons document scanners rapidly and
efficiently digitize large volumes of information on paper. Canon offers a wide
range of scanner models, including color capable compact sheet-fed types and a
flatbed model suitable for book-type documents. Canon also offers a hybrid
model that can create microfilm records while digitizing the information.
Canons diverse lineup seeks to meet increased demands for digitizing office
documents to share across Internet or intranet platforms or to capture data
from forms with optical character recognition. Canons calculator operations, from development to production and
marketing, are centered in Hong Kong. The Canon tradition of technological
innovation has been inherited by its personal information products, from
calculators with printers to electronic dictionaries. Canon continues to
develop distinct, appealing personal information products that reflect trends
and demand. The work stations and personal computers sold by Canon are manufactured by
third parties under the manufacturers own brand names. -Cameras- Canon manufactures and markets digital cameras and film cameras. Canon
also manufactures and markets digital video camcorders, lenses, and various
camera accessories. Digital cameras have become common tools to input images into PCs. In
addition to ensuring the best possible image quality throughout its product
lineup, Canon offers digital compact cameras that are easy to use and to carry.
In 2003, the compact digital camera market continued to show significant
growth. Canon introduced six new PowerShot series and three Digital ELPH series
cameras and has finally reached the top position in the industry, in unit sales
basis. Canons digital single-lens reflex cameras are designed to meet needs from
amateurs to professionals. These cameras incorporate innovative technologies
such as 45-point area auto-focus, eye-controlled auto-focus, depth-of-field
control, Base-stored Image Sensor (BASIS), Complementary Metal Oxide
Semiconductor (CMOS) imaging sensors, Digital Imaging Processor (DIGIC), and a
fully electronic mount system to transmit data between the lens and the camera
chassis. Particularly in the digital single-lens reflex camera segment, popular
new product offerings including the EOS 10D and EOS Digital Rebel (EOS 300D
Digital) bolstered Canons dominant position worldwide. Canons digital
single-lens reflex cameras feature the companys proprietary, CMOS imaging
sensors to offer advantages like low image noise, and low power consumption.
Both the sensor technology, and the cameras themselves, won numerous awards in
the respective industries. Canon also offers a comprehensive line-up of conventional film cameras to
satisfy the needs of users everywhere, from models with high-performance zoom
lenses to models with large enhanced viewfinders and full water resistance.
Hindered by the surging popularity of digital cameras, the continued shrinking
of the conventional film camera market has been a recent trend. Canons
introduction of new models in fiscal 2003, however, enabled it to retain its
position firmly atop this market worldwide and to record a healthy level of
profitability. With a cautious eye on market trends, Canon will continue to
develop new products and maintain a firm commitment to the film camera market. In the camera lens segment, technological developments, including
diffractive optical elements, image stabilizer and ultrasonic motor, have
helped Canon to maintain a technical lead over other makers. Canon offers over
50 lenses in the EF series. These high-quality, high-performance lenses provide
outstanding performance with digital cameras as well as silver-halide cameras,
greatly contributing to Canons sales.
Due to market expansion of digital single-lens reflex cameras, sales of middle
to high-class lenses have been increasing. The introduction of new lenses
offering optimum performance with Canons digital single-lens reflex cameras is
planned for 2004. Canon also provides full line-up video camcorders from versatile, compact
and stylish models to its flagship models for professionals. Canons video
camcorders incorporate the same optical technologies and digital signal
processing technology as its world-renowned cameras, and come equipped with
optical
image stabilizers and its one-chip video integrated circuit
signal-processing system large scale integration to ensure high image quality.
Canons video camcorders are favored by many users for its optical image
stabilizer, and red-green-blue primary color filters. The adoption of megapixel
charge coupled devices, secure digital memory cards and universal serial bus
connectivity offers a wealth of possibilities for the creation and management
of still images, as well as video. In addition, together with DV Messenger
software, Canon video camcorders can be used to communicate via the Internet
with real-time sound and images. the worldwide digital video camcorder market,
Canons eight new products have increased its share in the market. According to
GfK Marketing Services Japan Ltd., a market research company, Canons Optura
300 (MVX 10i) maintained the leading position in terms of units of sales in the
Japanese market for the three months from October through December of fiscal
2003. The Optura was rated highly for its advanced DIGIC DV digital imaging
processor, which improves both digital movie quality and digital still quality. 4




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Since Canon introduced the new PictBridge-equipped CP series compact photo
printers in fiscal 2003, the market has shown very positive signs of accepting
this distinctive new printer category. Canons CP series of dye-sublimation
photo printers allows users to print digital photos without having to use a PC,
thereby creating a new photo-processing culture for digital camera users. In
fiscal 2004, Canon aims to show strong leadership and presence in this new
printer market. -Optical and other products - Canons optical and other products includes semiconductor production
equipment, broadcasting lenses, medical equipment and electronic components. Semiconductor production equipment includes steppers and mask aligners.
Steppers are used to expose circuits on silicon substrates. Canon has
commercialized a Krypton Fluoride excimer-laser steppers and an Argon Fluoride
excimer-laser scanning steppers. At the top of its class, the new Argon
Fluoride excimer-laser scanning stepper makes possible top-level throughput
rates of over 140 wph (wafers per hour) for 300 mm wafers. Canon announced in
Japan in July, 2003 that it had begun accepting purchase orders for its latest
300 mm-compatible lithography toolthe Canon FPA-6000ES6a Krypton Fluoride
scanning stepper enabling volume production at the 100 nm process node. Mask aligners are used to produce liquid crystal displays, or LCDs, and
Canons model for large-sized LCD substrates are sold particularly well in line
with increased demand for large flat panels for PC display and LCD televisions.
Canon, together with nine other Japanese semiconductor-industry companies, have
formed the Extreme Ultraviolet Lithography System Development Association. The
consortium aims to develop key technology for next-generation lithography. Canon is the world leader in television broadcasting lenses, which are
used to capture images from sports and news events, concerts and studio
broadcasts. Medical equipment sold by Canon includes X-ray cameras, retinal cameras,
autofractmeters and image-processing equipments for computerized diagnostic
systems. Canons pioneering digital radiography system takes X-ray photography
and medical diagnosis into the digital age. Other products sold by Canon include electronic components, such as
magnetic heads for audio and video tape recorders and micro-motors for printers
and other components, which are sold primarily to equipment manufacturers.
Canon has also been developing a cost efficient solar-power system that
incorporates amorphous silicon technology which is used in Canons high-end
monochrome copying machines. 
 Marketing and distribution Canon sells its products primarily through subsidiaries with
responsibility for specific geographic areas. Each subsidiary is responsible
for its own market research and for determining its sales channels, advertising
and promotional activities. In Japan, Canon sells its products primarily through Canon Sales Co.,
Inc., mainly to dealers and retail outlets. In the Americas, Canon sells its products primarily through Canon U.S.A.,
Inc., Canon Canada, Inc. and Canon Latin America, Inc., mainly to dealers and
retail outlets. In Europe, Canon sells its products primarily through Canon Europa N.V.,
which sells primarily through subsidiaries or independent distributors to
dealers and retail outlets in each locality. In addition, copying machines are
sold directly to end-users by Canon (U.K.) Ltd. in the United Kingdom, and by
Canon France S.A. in France. In Southeast Asia and Oceania, Canon sells its products through
subsidiaries located in those areas. In addition, copying machines are sold
directly to end-users by Canon Australia Pty. Ltd. in Australia. Canon also sells laser beam printers on an OEM basis to Hewlett-Packard
Company. Hewlett-Packard Company resells these printers under the HP LaserJet
Printers name. During fiscal 2003, such sales constituted approximately 20% of
Canons consolidated net sales, as compared to 21% in the previous fiscal year. 
 Service In Japan and overseas, product service is provided in part by independent
retail outlets and designated service centers that receive technical training
assistance from Canon. Canon also services its products directly. Most of Canons business machines carry warranties of varying terms
depending upon the model and the country of sale. Cameras and camera
accessories carry a one-year warranty based on normal use. Canon services its copying machines and supplies replacement drums, parts,
toner and paper. In Japan, most customers enter into a maintenance service
contract under which Canon provides maintenance services, replacement drums and
parts in return for a per-copy charge. Copying machines which are not covered
by a service contract may be serviced from time to time by Canon or local
dealers for a fee. 5




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NET SALES BY PRODUCT GROUP Years ended December 312003
    
    change
    
    2002
    
    change
    
    2001(Millions of yen except percentage data)Bussiness machines:Office imaging products
    
    Yen
    1,061,099
    
    
    
    +3.7
    %
    
    
    1,023,131
    
    
    
    +4.4
    %
    
    
    980,053Computer peripherals
    
    
    1,089,312
    
    
    
    +3.2
    
    
    
    1,055,956
    
    
    
    +0.8
    
    
    
    1,047,385Bussiness information products
    
    
    123,493
    
    
    
    -16.1
    
    
    
    147,108
    
    
    
    -25.0
    
    
    
    196,0512,273,904
    
    
    
    +2.1
    
    
    
    2,226,195
    
    
    
    +0.1
    
    
    
    2,223,489Cameras
    
    
    653,540
    
    
    
    +34.5
    
    
    
    485,778
    
    
    
    +27.4
    
    
    
    381,367Optical and other products
    
    
    270,628
    
    
    
    +18.6
    
    
    
    228,155
    
    
    
    -24.6
    
    
    
    302,717Total
    
    Yen
    3,198,072
    
    
    
    +8.8
    
    
    
    2,940,128
    
    
    
    +1.1
    
    
    
    2,907,573
 NET SALES BY GEOGRAPHIC AREA Years ended December 312003
    
    change
    
    2002
    
    change
    
    2001(Millions of yen except percentage data)JapanUnaffiliated customers
    
    Yen
    856,851
    
    
    
    +8.6
    %
    
    
    789,066
    
    
    
    -8.1
    %
    
    
    858,580Intersegment
    
    
    1,662,172
    
    
    
    +12.7
    
    
    
    1,475,091
    
    
    
    +7.0
    
    
    
    1,378,031Total
    
    
    2,519,023
    
    
    
    +11.3
    
    
    
    2,264,157
    
    
    
    +1.2
    
    
    
    2,236,611AmericasUnaffiliated customers
    
    Yen
    1,044,998
    
    
    
    +3.7
    %
    
    
    1,007,572
    
    
    
    +2.4
    %
    
    
    983,561Intersegment
    
    
    8,101
    
    
    
    -17.3
    
    
    
    9,791
    
    
    
    -44.0
    
    
    
    17,475Total
    
    
    1,053,099
    
    
    
    +3.5
    
    
    
    1,017,363
    
    
    
    +1.6
    
    
    
    1,001,036EuropeUnaffiliated customers
    
    Yen
    968,938
    
    
    
    +13.6
    %
    
    
    852,931
    
    
    
    +5.9
    %
    
    
    805,243Intersegment
    
    
    3,861
    
    
    
    -16.8
    
    
    
    4,639
    
    
    
    +89.4
    
    
    
    2,449Total
    
    
    972,799
    
    
    
    +13.4
    
    
    
    857,570
    
    
    
    +6.2
    
    
    
    807,692OthersUnaffiliated customers
    
    Yen
    327,285
    
    
    
    +12.6
    %
    
    
    290,559
    
    
    
    +11.7
    %
    
    
    260,189Intersegment
    
    
    503,119
    
    
    
    +17.9
    
    
    
    426,914
    
    
    
    +42.6
    
    
    
    299,410Total
    
    
    830,404
    
    
    
    +15.7
    
    
    
    717,473
    
    
    
    +28.2
    
    
    
    559,599EliminationsUnaffiliated customers
    
    Yen
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    Intersegment
    
    
    (2,177,253
    )
    
    
    
    
    
    
    (1,916,435
    )
    
    
    
    
    
    
    (1,697,365
    )Total
    
    
    (2,177,253
    )
    
    
    
    
    
    
    (1,916,435
    )
    
    
    
    
    
    
    (1,697,365
    )ConsolidatedUnaffiliated customers
    
    Yen
    3,198,072
    
    
    
    +8.8
    %
    
    
    2,940,128
    
    
    
    +1.1
    %
    
    
    2,907,573Intersegment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,198,072
    
    
    
    +8.8
    
    
    
    2,940,128
    
    
    
    +1.1
    
    
    
    2,907,573
 Note: Net sales geographic area is determined by the location of the Canon
entity originating the sale. Total operating profit by category is discussed in Item 5A Operating Results. 
 Seasonality Canons sales for the 4th quarter period are usually higher than those in
the other three quarters, mainly owing to strong demand for consumer products,
such as cameras and bubble jet printers, during the year-end holiday. In Japan,
corporate demand for office products peaks in the 1st quarter, as many Japanese
companies close their books in March. Sales also tend to increase at the start
of the new school year in each of the respective regions. 
 Sources of supply Canon purchases a variety of parts and raw materials, such as glass,
aluminum, plastic, steel and chemicals for use in product manufacturing. All
finished and semi-finished products purchased from outside sources are produced
in accordance with Canons designs and specifications. Canon purchases parts
and raw materials worldwide for its global production activities. Canon
assesses and selects suppliers based on a number of criteria, including
environmental friendliness, quality, cost, stability of supply and financial
condition. In addition, there has been a recent increase in prices of parts for
optical products, due in part to the limited number of suppliers of glass
materials and light source lasers. However, Canon has not experienced any
difficulty obtaining parts or raw materials and believes that it will be able
to continue to obtain the same in sufficient quantities to meet its needs. 6




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##### Table of Contents



Canon also places significant emphasis on in-house development of
production tools. Canon recently purchased a mold-production company, adding to
its ability to produce many of the metal molds needed for production. Canon
also produces many of the tuning and measuring tools needed for the
development, maintenance and repair of its production equipment. Key tools such
as these are not marketed for sale; they are reserved for use within the Canon
Group. Canons ability to develop its own production tools helps establish
quality control and allows for speed and flexibility when retooling is
necessary  a crucial advantage in its cell production processes. Cell
production is the production system in which the entire production process is
undertaken by small groups of employees. In-house tool development may also
help cut costs over time and prevent the leakage of Canons core proprietary
technologies. 
 Competition Canon encounters intense competition in all areas of its business activity
throughout the world. Canons competitors range from some of the worlds major
multinational corporations to smaller, highly specialized companies. Canon
competes in a number of different business areas, whereas many of its
competitors are relatively more focused on one or more individual industries.
Consequently, Canon may face significant competition from entities that apply
greater financial, technological, sales and marketing or other resources than
Canon to their activities in a particular market segment. The principal elements of competition which Canon faces in each of its
markets are technology, quality, reliability, performance, price and customer
service and support. Canon believes that much of its ability to compete
effectively depends on conducting successful research and development
activities that enable it to create new or improved products and release them
on a timely basis and at commercially attractive prices. The competitive environments in which each product group operates are
described below:    Business machines The markets for office imaging products, computer peripherals and business
information products are highly competitive. Canons primary competitors in
these markets are Xerox Corporation, Hewlett-Packard Company, Lexmark
International Group Inc., Ricoh Company, Ltd., and Epson Corporation. Canon
believes that it is one of the leading global manufacturers of digital MFDs,
laser beam printers, bubble jet printers, image scanners and facsimile
machines. In addition to the general elements of competition described above,
Canons ability to compete successfully in these markets also depends
significantly on whether it can provide effective, broad-based business
solutions to its customers that solve multiple interrelated client needs. In
particular, the ability to provide equipment and software that connect
effectively to computer networks (ranging in scope from local area networks to
the Internet) is often a key to Canons competitive strength in these markets.
In China, whose markets are expected to expand since its joining of the World
Trade Organization, the current market leaders are Toshiba Tec Corporation,
Sharp Corporation and Konica Minolta Holdings, Inc. However, Canon is striving
to become one of the leading players in China. Canon believes that the
introduction of new digital technologies and value-added solutions will help
steer Canons business successfully through fast-moving markets such as China.    Cameras Competition in the camera industry is intense, with many established
market participants offering similar products. Canons primary competitors in
digital cameras are Sony Corporation, Fuji Photo Film Co., Ltd., Olympus
Optical Co., Ltd., Nikon Corporation, Casio Computer Co., Ltd. and Eastman
Kodak Company. Currently, Canon shares the top position with Sony Corporation
in unit sales of compact digital cameras, while Canon is the current leader in
the digital single-lens reflex camera segment. Canons primary competitors in
conventional film cameras are Nikon Corporation, Konica Minolta Holdings, Inc.,
Pentax Corporation, Olympus Optical Co., Ltd., and Fuji Photo Film Co., Ltd.
Hindered by the surging popularity of digital cameras, the conventional film
camera market continued to shrink in fiscal 2003. The introduction of new
models, however, enabled Canon to retain its position firmly atop this market
worldwide. Canons primary competitors in digital video camcorders are Sony
Corporation, Victor Company of Japan Ltd. and Matsushita Electric Industrial
Co., Ltd. In fiscal 2003, Canon expanded greatly its overall market share in
digital video camcorders, especially in the United States. Canon believes that
developing cameras with increasingly high resolution and faster image
processing are critical to its ability to remain competitive in the
fast-growing digital camera market segment.    Steppers and Aligners The market for steppers and aligners, used in the manufacture of
semiconductor devices and LCDs, is highly competitive. The market is
characterized by a relatively small number of dominant suppliers, since the
development of steppers and aligners requires extremely precise design and
manufacturing techniques and, as a result, very high levels of capital
investment. Canons primary competitors in the market for steppers and aligners are
Nikon Corporation and ASML Holding N.V., or ASML. Nikon Corporation has a
reputation for its excellent technology, especially optical lenses, and Intel
Corporation, the worlds leading semiconductor manufacturer, is one of their
major customers. ASML has in recent years improved its competitive position by
taking advantage of government subsidies and by focusing on the rapidly growing
foundry manufacturer industry. In fiscal 2002, ASML further increased its
competitive position by acquiring SVG Lithography Systems Inc. As a result of
the acquisition, ASML is now one of the largest semiconductor manufacturing
equipment companies in Europe. Because of the substantial capital expenditures required to install and
integrate equipment into a semiconductor production line, semiconductor
manufacturers tend to purchase their stepper and aligner production equipment
from the vendor that originally supplied the chip fabrication equipment. Canon
competes principally on its ability to meet and exceed product specifications,
including resolution and throughput, quality, reliability and system
maintenance cost. Because of the very rapid pace of technological innovation in
the semiconductor industry, Canon also believes that its ability to provide new
products on a timely basis is also a key competitive consideration for
customers seeking to integrate stepper and aligner production systems into the
planning and design of their new facilities. 7




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Patents and licenses Canon holds a large number of patents (including utility model rights),
design rights and trademarks in Japan and abroad to protect its research and
development and utilizes these intellectual property rights as important
strategic management tools. For instance, Canon has obtained and maintains its
intellectual property rights such as patents in its products business
operations, and forms alliances and technological exchanges with other
companies. According to the Statistical Report issued annually by the United States
Patent and Trademark Office, Canon has been consistently ranked as second or
third in recent years in terms of the number of patents issued in the United
States. Canon has granted licenses with respect to its patents to various Japanese
and foreign companies, particularly in areas such as electrophotography, laser
beam printers, multifunction printers and facsimiles. Some examples include: Oki Electric Industry Co., Ltd.
    
    (LED printers)Matsushita Electric Industrial Co., Ltd.
    
    (electrophotography)Sharp Corporation
    
    (facsimiles)Toshiba Corporation
    
    (business machines)Ricoh Company, Ltd.
    
    (electrophotography)Sanyo Electric Co., Ltd.
    
    (electronic still camera)Samsung Electronics Co., Ltd.
    
    (laser beam printers, multifunction printers and facsimiles)Brother Industries, Ltd.
    
    (electrophotography and facsimiles)Kyocera Mita Corporation
    
    (electrophotography)
 Canon has also been granted licenses with respect to patents held by other
companies. Some examples include: Jerome H. Lemelson Patent Incentives, Inc.
    
    (computer systems, image recording, communication devices)Energy Conversion Devices, Inc.
    
    (solar battery)Honeywell Inc.
    
    (camera and video products)Gilbert P. Hyatt U.S. Philips Corporation
    
    (microcomputer)SI Diamond Technology Inc.
    
    (display technology)
 Canon has also entered into cross-licensing agreements with other major
industry participants. Some examples include: International Business Machines Corporation
    
    (information handling systems)Hewlett-Packard Company
    
    (Bubble Jet printers)Xerox Corporation
    
    (business machines)Matsushita Electric Industrial Co., Ltd.
    
    (video tape recorders and video cameras)Eastman Kodak Co.
    
    (electro-photography and image processing technology)Ricoh Company, Ltd.
    
    (electrophotography products, facsimiles, and word processors)
 Canon has placed high priority on the management of its intellectual
property as part of its management strategies to enhance its global business
operations. Some products which are material to Canons operating results,
incorporate patented technology which is critical to the continued success of
these products. Typically, these products incorporate technology reflected in
dozens of different patents. Canon does not believe that its business, as a
whole, is dependent on, or that its profitability would be materially affected
by the revocation, termination, expiration or infringement upon, any particular
patent, copyright, license or intellectual property rights or group thereof. 
 Environmental regulations Canon is subject to a wide variety of laws and regulations as well as
industry standards relating to energy and resource conservation, recycling,
global warming, pollution prevention, pollution remediation, and environmental
health and safety. Some of the environmental laws which affect Canons
businesses are summarized below. 1.   European Union Directive on the Restriction of the Use of Certain
Hazardous Substances in Electrical and Electronic Equipment , or RoHS
Directive, and Directive on Waste Electrical and Electronic Equipment, or
WEEE Directive. These directives were adopted by the European Parliament in December 2002.
Member states are required to bring into force the laws necessary to comply
with these directives by August 13, 2004. Commencing July 1, 2006, companies
must ensure that their electrical and electronic equipment sold in the European
Union does not contain lead, cadmium, hexavalent chromium, mercury,
polybrominated biphenyls or polybrominated diphenyl ethers if placed on the
market after that date. Pursuant to the RoHS Directive, Canon will be required
to adapt its products so that they do not contain the prohibited hazardous
substances. The WEEE Directive requires that by August 13, 2005, companies that sell
electrical and electronic equipment bearing their trade names in the European
Union must arrange and pay for the collection, treatment, recycling, recovery
and disposal of their equipment and achieve designated recycling rates by
December 31, 2006. Pursuant to the WEEE Directive, Canon will be required to
establish collection and recycling systems for waste electrical and electronic
equipment and achieve the recycling ratio of waste electrical and electronic
equipment by the designated dates. The increased cost associated with the WEEE
directive may adversely affect Canons results of operations. 8




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2.   Superfund of the United States. Under the Comprehensive Environmental Response, Compensation and Liability
Act, or CERCLA, and the Resource Conservation and Recovery Act (collectively
known as Superfund) and related state laws, certain persons may be liable for
the release or threatened release of hazardous substances, including petroleum
and its derivatives, into the environment. These persons include the current
owner or operator of property where the release or threatened release occurred,
any persons who owned or operated the property when the release occurred, and
any persons who arranged for the disposal of hazardous substances at the
property. Liability under CERCLA is strict, retroactive, and in most cases
involving the state government as plaintiff, is joint and several, so that any
responsible party may be liable for the entire cost of investigating and
remediating the release of hazardous substances. As a practical matter,
however, liability at most CERCLA and similar sites is shared among all
solvent, potentially responsible parties. The liability of a party is
determined by the cost of investigation and remediation, the portion of the
hazardous substance(s) the party contributed to the site, and the number of
solvent, potentially responsible parties. Canon has identified a potential remediation site in connection with one
of its former manufacturing sites. See Risk FactorsRisks Related to Canons
BusinessEnvironmental clean-up and remediation costs relating to Canons
properties and associated litigation could decrease Canons net cash flow,
adversely affect its results of operations and impair its financial condition. 3.   Soil Pollution Prevention Law of Japan The Soil Pollution Prevention Law of Japan went into effect in February
2003. The law requires an owner of land to have the soil investigated by a
designated organization for the purpose of measuring the level of soil
pollution when the land is to be transferred or to be used for another purpose.
The results of such investigation are reported to the prefectural governor. If
the soil pollution is not within standards specified in the law, the governor
will designate the land as a designated area, publicly announce such
designation and make available upon request the investigation report. The
substances designated in the law consist of 25 chemical groups, including
substances such as lead, arsenic, and trichloro ethylene. If there is a
possibility that the soil pollution of the designated area may affect human
health, the governor will issue an order to the land owner to take remedial
actions. In response to the law, Canon has commenced a detailed survey and
measurement of soil and groundwater to determine the existence of pollution at
all of Canon Groups operational sites in Japan. The survey and measurement
will entail considerable cost. Additional costs may arise as remedial measures
become necessary. These factors may adversely affect Canons results of
operations and financial conditions. 4.   Law for Promotion of Effective Utilization of Resources of Japan The Law for Promotion of Effective Utilization of Resources of Japan, or
the Resources Law, was enacted in April 2001. The Resources Law requires
specified recycling industries, including the copying machine industry, to
enact measures designed to promote waste reduction, reuse and recycling of raw
materials. These requirements will increase Canons costs and may have an
adverse affect on its results of operations and financial conditions. 5.   Law on Promoting Green Purchasing of Japan The Law on Promoting Green Purchasing of Japan took effect in April 2001.
The law encourages both national and local governments to procure products with
low environmental burdens. Businesses are required to provide information that
is necessary to determine the environmental impact of products that they
manufacture. In response to the law, Canon expects in the future to:  
    
    manufacture products that consume less electricity to prevent global warming and to conserve energy,
    
    use recycled parts and recycled materials,
    
    reduce the types of raw materials used in order to conserve resources,
    
    accelerate the date by which the requirements of the law are implemented to promote the elimination of hazardous substances. The law also requires Canon to collect its used products and recycle them,
establish alternative technologies for hazardous substances used in products
and standardize the substances used in its products. These measures will entail
additional costs and may adversely affect its results of operations and
financial conditions. 6.   California Electronic Waste Recycling Act of 2003 Enacted in September 2003, the California Electronic Waste Recycling Act
seeks to create a system for the collection and recycling of electronic
products. The Act makes it unlawful to sell, on and after July 1, 2004, a
covered electronic device in California to a consumer unless the California
Integrated Waste Management Board or the California Environmental Protection
Agencys Department of Toxic Substances Control determines that the
manufacturer of that device is in compliance with the Act. Electronic devices
covered include cathode ray tubes, cathode ray tube devices, flat panel
screens, or any other similar video display device with a screen size greater
than four inches measured diagonally, if the Department of Toxic Substances
Control determines that they are hazardous when discarded or disposed. The Act
prohibits the sale of a covered electronic device, after January 1, 2005, that
is not labeled, as specified in the Act. Under the Act, retailers selling a
covered electronic device in California must collect an electronic waste
recycling fee from the consumer on and after July 1, 2004, and to transmit the
fee to the California Integrated Waste Management Board. A manufacturer that
sells covered electronic devices in California must, by July 1, 2005, and at
least once annually thereafter, submit a report to the California Integrated
Waste Management Board on the number of covered electronic devices it sold in
California during the previous calendar year and other information regarding
certain specified materials in those devices. This other information includes
estimated amounts of use and reduction in the use from the previous year of six
hazardous substances (lead, cadmium, hexavalent chromium, mercury,
polybrominated biphenyls or polybrominated diphenyl ethers), as well as
estimated amounts of recycled materials contained in covered devices.
Manufacturers are also required to make information available to consumers
describing where and how to return, recycle and dispose of a covered electronic
device. The scope of the covered devices is yet unclear, and Canon will incur
costs once the Department of Toxic Substances Control determines which of its
products are covered by the Act. 9




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7.   Draft European Union Directive on Batteries and Accumulators and Spent
Batteries and Accumulators On November 21, 2003, the European Commission proposed a draft Directive
on Batteries and Accumulators and Spent Batteries and Accumulators to replace a
similar existing directive. Whereas the existing directive applies only to
batteries with a certain mercury, cadmium and lead content, the new directive
applies to all batteries and accumulators placed on the European Community
market. When enacted, the new directive will require specified labels on all
batteries. In addition, the directive establishes specific targets for
collection, treatment and recycling of batteries and accumulators. Canon
expects that compliance with the directive will increase its financial costs
such as recycling fees and guarantees of products placed on the market. 8.   Clean Production Promotion Law of China The Clean Production Promotion Law of China, effective as of January 1,
2003, provides, among other things, for environmentally conscious design,
elimination of hazardous substances, ease of disassembly, material
identification, collection and recycling. The Chinese government is expected to
publish a list of products to be collected, but it is yet unclear what action
Canon needs to take at the present time. 9.   Draft Management Methods for the Prevention and Control of Pollution from
the Production of Electronic Information Products of China Modeled on the European Union RoHS Directive described above, the Chinese
Ministry of Information Industry and State Environmental Protection
Administration are drafting a proposal  Management Methods for the Prevention
and Control of Pollution from the Production of Electronic Information Products
 that regulates the content of electronic information products. This draft
law, the latest version of which was issued in August 2003, would prohibit
certain substances from being included in electronic products that are
manufactured or sold in China. In addition to the six substances prohibited by
the EU RoHS Directive, the draft Chinese law would also prohibit other
hazardous substances, although it is unclear what substances are covered by
this phrase. The proposed law requires producers to label goods that contain
harmful materials and designate them as fully-recyclable, partially-recyclable,
or non-recyclable. Producers would also be required to assume costs of recovery
of discarded equipment. The August 2003 draft does not indicate when the law
might become effective, although a previous draft proposed an effective date of
January 1, 2006.  New environmental legislation and regulations such as the RoHS Directive
in Europe and similar legislation and regulation in other countries will have
an impact on Canons production methods. Lead-free solder, for example, which
is to replace traditional toxic lead solder, demands different and more complex
manufacturing processes due to its higher melting point. Although the details
of the RoHS Directive are yet unclear, Canon has proceeded to develop a
green, toxic-free procurement policy with other industry leaders. In addition, Canon has long been an industry leader in the recycling of
laser inkjet cartridges and other consumable items, as well as in the actual
materials used for the production and packaging of its products. In 1990, Canon
pioneered the collecting and recycling of used toner cartridges, and has to
date recycled over 120,000 tons of those cartridges. Today, the toner
cartridges Canon collects are 100% recycled in four facilities worldwide. 
 C.Organizational structure Canon Inc. and its subsidiaries and affiliates form a group of which Canon
Inc. is the parent company. As of December 31,2003, Canon had 198 consolidated
subsidiaries and 19 affiliated companies accounted for by the equity method. The following table lists the significant subsidiaries owned by Canon
Inc., all of which are consolidated, as of December 31, 2003. Proportion of
    
    Proportion ofownership interest
    
    voting powerName of company
    
    Head office location
    
    owned
    
    heldCanon Sales Co., Inc.
    
    Tokyo, Japan
    
    
    50.3
    %
    
    
    51.1
    %Canon U.S.A., Inc.
    
    New York, U.S.A.
    
    
    100.0
    %
    
    
    100.0
    %Canon Europa N.V.
    
    Amstelveen, The Netherlands
    
    
    100.0
    %
    
    
    100.0
    %
 10




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##### Table of Contents



D. Property, plants and equipment Canons manufacturing is conducted primarily at 18 plants in Japan and 14
plants in other countries. Canon owns all of the buildings and the land on
which its plants are located, with the exception of certain leases of land and
floor space of certain of its subsidiaries. The names and locations of Canons
plants
and other facilities, their approximate floor space and the principal
activities and products manufactured therein as at December 31, 2003 are as
follows: Floor space(includingName and location
    
    leased space)
    
    Principal activities and products manufacturedDomestic
    
    (Thousands ofsquare feet)Shimomaruko Headquarters, Tokyo
(Corporate Headquarters)
    
    
    2,473
    
    
    Develop business machines and cameras;
prosecute patents; conduct purchasing,
quality assurance, research, and planning for
production engineering and technologyKosugi Office, Kanagawa
    
    
    398
    
    
    Conduct R&D in software and systemsFuji-Susono Research Park,
Shizuoka
    
    
    1,014
    
    
    Conduct R&D in electro-photographic
technologiesCanon Research Center,
Kanagawa
    
    
    137
    
    
    Conduct R&D of basic and advanced technologies for future
businessesHiratsuka Development Center,
    
    
    460
    
    
    Conduct R&D in electronic devices and displayAyase Office, Kanagawa
    
    
    315
    
    
    Conduct R&D in semiconductor devicesEcology Research & Development
Center, Kyoto
    
    
    92
    
    
    Conduct R&D in environmental technologiesOptics R&D Center, Tochigi
    
    
    187
    
    
    Conduct R&D in optics technologiesTamagawa Plant, Kanagawa
    
    
    434
    
    
    Development of inkjet printers and inkjet chemicalsUtsunomiya Plant,
Tochigi
    
    
    586
    
    
    Produce camera lenses, video camcorder lenses,
broadcasting lenses and other specialized
optical lensesToride Plant,
Ibaraki
    
    
    2,406
    
    
    Conduct R&D in electro-photographic
technologies, mass-production trials and
support, and produce copying machines and
laser beam printer consumablesAmi Plant,
Ibaraki
    
    
    1,258
    
    
    Produce business machines, tools, production
equipment and optical productsUtsunomiya Optical Products
Operations, Tochigi
    
    
    1,005
    
    
    R&D, manufacturing, sales, servicing of steppers;
R&D, sales of optical broadcasting equipment;
R&D, sales, servicing of medical equipmentKamisato Office, Saitama
    
    
    62
    
    
    Produce medical equipment
 11




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##### Table of Contents



Floor space(includingName and location
    
    leased space)
    
    Principal activities and products manufacturedDomestic
    
    (Thousands ofsquare feet)Canon Electronics Inc. Plants,
Saitama and Gunma
    
    
    1,070
    
    
    Produce laser beam printers, laser beam printer
units, magnetic components and micrographicsCanon Finetech Inc, Plants,
Ibaraki, Tokyo, Yamanashi, and Fukui
    
    
    1,405
    
    
    Produce copying machines, copying machine
consumables, copying machine parts, copying
machine accessories, inkjet color card and
label printersCanon Precision Inc. Plants,
Tokyo and Aomori
    
    
    654
    
    
    Produce micro-motors, precision parts and
laser beam printer consumablesOptron Inc. Plant,
Ibaraki
    
    
    136
    
    
    Produce optical crystals and vapor
deposition materialsCanon Chemicals Inc. Plants,
Ibaraki
    
    
    1,390
    
    
    Produce copying machine and laser beam
printer consumablesCanon Components Inc. Plant,
Saitama
    
    
    357
    
    
    Produce contact image sensors and inkjet
printer consumablesOita Canon Inc. Plant,
Oita
    
    
    320
    
    
    Produce 35mm and advanced photo system cameras, digital video
camcorders and digital camerasNagahama Canon Inc. Plant,
Shiga
    
    
    1,021
    
    
    Produce laser beam printers, laser
beam printer consumables, inkjet printer consumablesOita Canon Materials Inc. Plant, Oita
    
    
    1,190
    
    
    Produce copying machine and laser beam printer consumablesUeno Canon Materials Inc. Plant,
Mie
    
    
    559
    
    
    Produce copying machine and laser beam
printer consumablesFukushima Canon Inc. Plant, Fukushima
    
    
    649
    
    
    Produce inkjet chemicalsCanon N.T.C., Inc. Plants,
Ibaraki and Saitama
    
    
    1,322
    
    
    Produce parts for business machinesNisca Corporation Plant,
Yamanashi
    
    
    676
    
    
    Produce copying machine parts and
accessories
 12




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##### Table of Contents



Floor space(includingName and location
    
    leased space)
    
    Principal activities and products manufacturedOverseas
    
    (Thousands ofsquare feet)[Europe]Canon Giessen GmbH Plant,
Giessen, Germany
    
    
    359
    
    
    Produce copying machines and copying machine
consumablesCanon Bretagne S.A.S. Plant,
Liffre, France
    
    
    506
    
    
    Produce copying machines, copying machine
consumables and laser beam printers[America]Canon Virginia, Inc. Plants,
Virginia, U.S.
    
    
    1,010
    
    
    Produce laser beam printers and laser beam
printer consumables; refurbish copying machines[Asia]Canon Inc., Taiwan Plant,
Taiwan
    
    
    432
    
    
    Development and manufacture 35mm single-lens reflex
cameras and leaf shutter cameras;
manufacture advanced photo system camerasCanon Opto (Malaysia) Sdn. Bhd. Plant,
Selangor, Malaysia
    
    
    551
    
    
    Produce leaf shutters, advanced photo system cameras, digital
cameras, video camcorder and camera lensesCanon Dalian Business Machines, Inc.
Plant, Dalian China
    
    
    1,213
    
    
    Produce laser beam printers and laser beam
printer consumablesCannon Zhuhai, Inc. Plant,
Zhuhai, China
    
    
    669
    
    
    Produce leaf shutter cameras, laser beam
printers, facsimile machines and scannerTianjin Canon Co., Ltd. Plant,
Tianjin, China
    
    
    154
    
    
    Produce copying machinesGuang-Dong United Optical Instrument
Co., Ltd. Plant, Guang Dong, China
    
    
    14
    
    
    Produce leaf shutter camerasCanon Hi-Tech (Thailand) Ltd. Plant,
Ayutthaya, Thailand
    
    
    1,043
    
    
    Produce copying machines, inkjet printers
and facsimile machinesCanon Engineering (Thailand) Ltd. Plant,
Ayutthaya, Thailand
    
    
    128
    
    
    Produce business machines part molds and diesCanon Zhougshan Business Machines
Co., Ltd. Plant, Zhougshan, China
    
    
    470
    
    
    Produce laser beam printersCanon Vietnam Co., Ltd. Plant,
Hanoi, Vietnam
    
    
    275
    
    
    Produce inkjet printersCanon Suzhou Inc. Plant,
Suzhou, China
    
    
    921
    
    
    Produce copying machines
 Canon considers its manufacturing and other facilities to be well
maintained and believes that its plant capacity is adequate for its current
requirements.
At December 31, 2003, book value Yen 11,358 million of land, buildings and
related equipment were subject to mortgages securing Yen 4,955 million of
Canons indebtedness. 13




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##### Table of Contents



Item 6.   Directors, Senior Management and Employees 
 A.   Directors and senior management Directors and corporate auditors of the Company as of March 31, 2004 and
their respective business experience are listed below. Name
    
    Position
    
    Date of
    
    Business experience(Date of birth)
    
    (Group executive/function)
    
    commencement
    
    (*current position/function)Fujio Mitarai
    
    President & C.E.O.
    
    4/1961
    
    Entered the Company(Sept. 23, 1935)
    
    
    
    1/1979
    
    President of Canon U.S.A., Inc.3/1981
    
    Director3/1985
    
    Managing Director1/1989
    
    In charge of HQ administration3/1989
    
    Senior Managing Director3/1993
    
    Executive Vice President9/1995
    
    President & C.E.O.*Yukio Yamashita
    
    Senior Managing Director
    
    3/1962
    
    Entered the Company(May 15, 1939)
    
    (Group Executive of Human
    
    8/1980
    
    President of Canon (UK) Ltd.Resource Management &
    
    3/1991
    
    DirectorOrganization HQ)
    
    1/1996
    
    Group Executive of Human Resource
Management &     Organization HQ*3/1997
    
    Managing Director3/1999
    
    Senior Managing Director*Toshizo Tanaka
    
    Senior Managing Director
    
    4/1964
    
    Entered the Company(Oct. 8, 1940)
    
    (Group Executive of Finance &
    
    1/1992
    
    Deputy Group Executive of
Finance & Accounting HQAccounting HQ)
    
    3/1995
    
    Director4/1995
    
    Group Executive of Finance & Accounting HQ*3/1997
    
    Managing Director3/2001
    
    Senior Managing Director*Kinya Uchida
    
    Senior Managing Director
    
    4/1963
    
    Entered the Company(Nov. 21, 1938)
    
    
    
    6/1987
    
    President of Canon Singapore Pte. Ltd.3/1995
    
    Director4/1995
    
    President of Canon France S.A.3/1999
    
    Managing Director4/1999
    
    President of Canon U.S.A., Inc.*3/2003
    
    Senior Managing Director*Tsuneji Uchida
    
    Senior Managing Director
    
    4/1965
    
    Entered the Company(Oct. 30, 1941)
    
    (Chief Executive of Image
    
    4/1995
    
    Group Executive of Lens Products GroupCommunication Products
    
    3/1997
    
    DirectorOperations HQ)
    
    4/1997
    
    Deputy Chief Executive of Camera Operations HQ/Group     Executive of Photo Products Group4/1999
    
    Chief Executive of Camera Operations HQ7/1999
    
    In charge of promotion of digital photo
business1/2000
    
    In charge of promotion of digital photo home
business1/2001
    
    Chief Executive of Image Communications
Products HQ*3/2001
    
    Managing Director3/2003
    
    Senior Managing Director*Yusuke Emura
    
    Managing Director
    
    4/1967
    
    Entered the Company(Nov. 30, 1944)
    
    (Group Executive of Global
    
    1/1989
    
    Toride plant managerEnvironment Promotion HQ)
    
    3/1993
    
    Director4/1994
    
    Ami plant manager4/1995
    
    Deputy Chief Executive of Office Imaging
Products HQ4/1996
    
    Chief Executive of Office Imaging Products HQ3/1999
    
    Managing Director*4/1999
    
    Group Executive of Production Management HQ1/2002
    
    Group Executive of Global Environment
Promotion HQ*
 14




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##### Table of Contents



Name
    
    Position
    
    Date of
    
    Business experience(Date of birth)
    
    (Group executive/function)
    
    commencement
    
    (*current position/function)Nobuyoshi Tanaka
    
    Managing Director
    
    4/1970
    
    Entered the Company(Dec. 23, 1945)
    
    (Group Executive of Corporate
    
    1/1991
    
    Senior General Manager of SemiconductorIntellectual Property & Legal HQ)
    
    
    
    Production Equipment Development Center3/1993
    
    Director4/1993
    
    Chief Executive of Optical Products HQ4/1999
    
    Group Executive of Corporate Intellectual Property &     Legal HQ*3/2001
    
    Managing Director*Junji Ichikawa
    
    Managing Director
    
    4/1965
    
    Entered Shiba Electronics Co., Ltd.(Feb. 9, 1943)
    
    (Group Executive of Production
    
    1/1970
    
    Entered the CompanyManagement HQ)
    
    4/1994
    
    Group Executive of Peripheral Group 13/1997
    
    Director4/1997
    
    Deputy Chief Executive of Peripheral Products HQ4/2000
    
    Chief Executive of Peripheral Products HQ3/2001
    
    Managing Director*4/2003
    
    Group Executive of Production Management HQ*Hajime Tsuruoka
    
    Managing Director
    
    3/1970
    
    Entered Meiji Seika Kaisha Ltd.(July 9, 1943)
    
    
    
    11/1973
    
    Entered the Company4/1995
    
    President of Canon Italia S.p.A.3/1997
    
    Director9/1997
    
    President of Canon Deutschland GmbH3/1999
    
    President of Canon Europa N.V.*3/2001
    
    Managing Director*Akiyoshi Moroe
    
    Managing Director
    
    4/1968
    
    Entered the Company(Sept. 28, 1944)
    
    (Group Executive of General
    
    7/1996
    
    Deputy Group of Executive of Human ResourceAffairs HQ)
    
    
    
    Management & Organization HQ(Group Executive of Information &
    
    3/1999
    
    DirectorCommunications Systems HQ)
    
    4/1999
    
    Group Executive of General Affairs HQ*10/2000
    
    Group Executive of Information & CommunicationsSystems HQ*3/2003
    
    Managing Director*Kunio Watanabe
    
    Managing Director
    
    4/1969
    
    Entered the Company(Oct. 3, 1944)
    
    (Group Executive of Corporate
    
    4/1995
    
    Group Executive of Corporate Strategy &Strategy & Development HQ)
    
    
    
    Development HQ*3/1999
    
    Director3/2003
    
    Managing Director*Ikuo Soma
    
    Managing Director
    
    4/1970
    
    Entered the Company(Aug. 4, 1946)
    
    (Chief Executive of Office
    
    1/1997
    
    Group Executive of Office Imaging Products Group 1Imaging Products HQ)
    
    3/1999
    
    Director4/1999
    
    Chief Executive of Office Imaging Products HQ*/Group     Executive of Office Imaging Products
Group 23/2003
    
    Managing Director*Hironori Yamamoto
    
    Managing Director
    
    4/1969
    
    Entered the Company(Dec. 23, 1943)
    
    (Group Executive of Core
    
    1/1998
    
    Deputy Group Executive of Production Management HQTechnology Development HQ)
    
    3/1999
    
    Director*(Group Executive of Surface-
    
    7/1999
    
    Group Executive of Core Technologyconduction Electron-emitter
    
    
    
    Development HQ*/Deputy Group Executive of DisplayDisplay Development HQ)
    
    
    
    Development HQ(Group Executive of Leading-Edge
    
    4/2001
    
    Group Executive of Display Development HQTechnology Development HQ)
    
    7/2003
    
    Group Executive of Surface-conduction
Electron-emitter     Display Development HQ*10/2003
    
    Group Executive of Leading-Edge Technology     Development HQ*3/2004
    
    Managing Director*
 15




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##### Table of Contents



Name
    
    Position
    
    Date of
    
    Business experience(Date of birth)
    
    (Group executive/function)
    
    commencement
    
    (*current position/function)Yoroku Adachi
    
    Director
    
    4/1970
    
    Entered the Company(Jan. 11, 1948)
    
    
    
    3/2001
    
    Chairman of Canon Singapore Pte. Ltd. *Chairman of Canon HongKong Co., Ltd. *Director*4/2001
    
    President of Canon (China) Co., Ltd. *Yasuo Mitsuhashi
    
    Director
    
    4/1974
    
    Entered the Company(Nov. 23, 1949)
    
    (Chief Executive of Peripheral
    
    2/2001
    
    Chief Executive of Chemical Products HQProducts HQ)
    
    3/2001
    
    Director*4/2003
    
    Chief Executive of Peripheral Products HQ*Katsuichi Shimizu
    
    Director
    
    4/1970
    
    Entered the Company(Nov. 13, 1946)
    
    (Chief Executive of Inkjet
    
    4/2001
    
    Deputy Chief Executive of Office Imaging Products HQProducts HQ)
    
    3/2003
    
    Director*4/2003
    
    Chief Executive of Inkjet Products HQ*Ryoichi Bamba
    
    Director
    
    4/1972
    
    Entered the Company(Nov. 25, 1946)
    
    
    
    4/1998
    
    Senior Vice President of Canon U.S.A., Inc.2/2003
    
    Executive Vice President of Canon U.S.A., Inc.*3/2003
    
    Director*Tomonori Iwashita
    
    Director
    
    4/1972
    
    Entered the Company(Jan. 28, 1949)
    
    (Deputy Chief Executive of Image
    
    4/1999
    
    Senior General Manager of Camera Development CenterCommunication Products HQ)
    
    1/2001
    
    Group Executive of Photo Products Group3/2003
    
    Director*4/2003
    
    Deputy Chief Executive of Image
Communication     Products HQ*Toshio Honma
    
    Director
    
    4/1972
    
    Entered the Company(Mar. 10, 1949)
    
    (Group Executive of L Printer
    
    4/2001
    
    Deputy Chief Executive of i Printer Products HQBusiness Promotion HQ*)
    
    3/2003
    
    Director*7/2003
    
    Group Executive
of L Printer Business Promotion HQ*Shigeru Imaiida
    
    Director
    
    4/1972
    
    Entered the Company(Sep. 16, 1948)
    
    (Deputy Grope Executive of
    
    8/1999
    
    Senior General Manager of Production EngineeringProduction Management HQ)
    
    
    
    Center3/2003
    
    Director*4/2003
    
    Deputy Grope Executive of Production Management HQ*Masahiro Ohsawa
    
    Director
    
    4/1971
    
    Entered the Company(May 26, 1947)
    
    (Deputy Group Executive of
    
    7/1997
    
    Vice President of Canon U.S.A., Inc.Finance & Accounting HQ)
    
    2/2003
    
    Senior Vice President of Canon U.S.A., Inc.7/2003
    
    Deputy Group Executive of Finance & Accounting HQ*3/2004
    
    Director*Keijiro Yamazaki
    
    Director
    
    4/1971
    
    Entered the Company(Oct. 14, 1948)
    
    (Deputy Group Executive of
    
    4/1999
    
    General Manager of Human ResourceHuman Resource Management &
    
    
    
    Management & Organization Div.Organization HQ)
    
    1/2000
    
    Deputy Group Executive of Human ResourceManagement & Organization HQ*3/2004
    
    Director*Syunichi Uzawa
    
    Director
    
    8/1978
    
    Entered the Company(Jan. 26, 1949)
    
    (Deputy Group Executive of
    
    1/1998
    
    Senior General Manager of Nano-technologySurface-conduction Electron-
    
    
    
    Research Centeremitter Display Development HQ)
    
    4/2001
    
    Deputy Group Executive of Display Development HQ7/2003
    
    Deputy Group Executive of Surface-conduction
Electron-     emitter Display Development HQ*3/2004
    
    Director*Masaki Nakaoka
    
    Director
    
    4/1975
    
    Entered the Company(Jan. 3, 1950)
    
    (Deputy Group Executive Office
    
    1/1997
    
    Senior General Manager of Office ImagingImaging Products HQ)
    
    
    
    Products Development Center 14/1999
    
    Group Executive of Office Imaging Products Group 14/2001
    
    Deputy Chief Executive of Office Imaging
Products HQ*3/2004
    
    Director*
 16




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##### Table of Contents



Name
    
    Position
    
    Date of
    
    Business experience(Date of birth)
    
    (Group executive/function)
    
    commencement
    
    (*current position/function)Toshiyuki Komatsu
    
    Director
    
    4/1972
    
    Entered the Company(Jan. 19, 1950)
    
    (Deputy Group Executive of
    
    1/1998
    
    Senior General Manager of Canon Research CenterLeading-Edge Technology
    
    1/2000
    
    Deputy Group Executive of Core TechnologyDevelopment HQ)
    
    
    
    Development HQ10/2003
    
    Deputy Group Executive of Leading-Edge
Technology     Development HQ*3/2004
    
    Director*Shigeyuki Matsumoto
    
    Director
    
    4/1974
    
    Entered the Company(Nov. 15, 1950)
    
    (Group Executive of Device
    
    1/1999
    
    Senior General Manager of Device Development CenterTechnology Development
    
    1/2002
    
    Group Executive of Device
Technology DevelopmentHeadquarters)
    
    
    
    Headquarters3/2004
    
    Director*Haruhisa Honda
    
    Director
    
    4/1974
    
    Entered the Company(Oct. 14, 1948)
    
    (Deputy Chief Executive of
    
    4/1995
    
    Senior General Manager of Cartridge DevelopmentChemical Products Operations)
    
    
    
    Center4/2003
    
    Deputy Chief Executive of Chemical
Products Operations3/2004
    
    Director*Teruomi Takahashi
    
    Corporate Auditor
    
    9/1971
    
    Entered the Company(June 10, 1943)
    
    
    
    3/1999
    
    Director*4/1999
    
    Chief Executive of Chemical Products HQ4/2001
    
    Chief Executive of i Printer Products HQ4/2003
    
    Chief Executive of Chemical Products HQ3/2004
    
    Corporate Auditor*Kunihiro Nagata
    
    Corporate Auditor
    
    4/1970
    
    Entered the Company(Mar. 16, 1948)
    
    
    
    1/1991
    
    General Manager of Business Machines
Accounting Dept.4/1995
    
    Senior General Manager of Business
Machines     Accounting & Production
Planning Center1/2003
    
    Deputy Group Executive of Corporate
Strategy     Development HQ3/2004
    
    Corporate Auditor*Tadashi Ohe
    
    Corporate Auditor
    
    4/1969
    
    Registration as a lawyer*(May 20, 1944)
    
    
    
    4/1989
    
    Instructor of Judicial Training Institution3/1994
    
    Corporate Auditor, the Company*Tetsuo Yoshizawa
    
    Corporate Auditor
    
    4/1968
    
    Entered The Dai-Ichi Mutual Life Insurance Co.(Sept. 5, 1945)
    
    
    
    4/1991
    
    General Manager of Investment Planning
Division4/1992
    
    General Manager Osaka of General Corporate
Group III4/1995
    
    General Manager of Financing Corporate
Division3/1998
    
    Corporate Auditor, the Company*
 Term All directors and corporate auditors are elected by the general meeting of
shareholders. The term of office of Directors is one year. The current term of all
Directors expires in March 2005. The term of office of Corporate Auditors is
four years. The current term for Mr. Ohe expires in March 2007, while current
terms for Mr. Takahashi, Mr. Nagata and Mr. Yoshizawa, who were newly elected
in the general meeting of shareholders in March 2004, expire in March 2008. Board members and corporate auditors may serve any number of consecutive
terms. There is no arrangement or understanding between any Director or Corporate
Auditor and any major shareholder, customer, supplier or other material
stakeholders in connection with the selection of such Director or corporate
auditor. 17




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##### Table of Contents



Board of Directors and Corporate Auditors The Companys articles of incorporation provide for a board of directors
of not more than 30 members and for not more than four corporate auditors.
Currently the number of board members is 27, and the number of corporate
auditors is four. There is no maximum age limit for members of the board. Board
members and corporate auditors may be removed from office at any time by a
resolution of a general meeting of shareholders. The board of directors has ultimate responsibility for the administration
of the Companys affairs. By resolution, the board of directors designates,
from among its members, representative directors, who have authority
individually to represent the Company generally in the conduct of its affairs. Under the Commercial Code of Japan, board members must refrain from
engaging in any business competing with the Company unless approved by a board
resolution, and no board member may vote on a proposal, arrangement or contract
in which that board member is deemed to be materially interested. The Commercial Code requires a resolution of the board of directors for a
company to acquire or dispose of material assets, to borrow substantial amounts
of money, to employ or discharge important employees such as corporate
officers, and to establish, change or abolish material corporate organizations
such as a branch office. The corporate auditors are not required to be and are not certified public
accountants. At least one of the corporate auditors must be a person who has
not been a board member or employee of the Company or any of its subsidiaries
during the five-year period prior to election as a corporate auditor. After the
conclusion of the ordinary general meeting of shareholders to be held with
respect to the first fiscal year ending on or after May 1, 2005, at least half
of corporate
auditors must be persons who have not been either board members or employees of
the Company or any of its subsidiaries. A corporate auditor may not at the same
time be a board member or an employee of the Company or any of its
subsidiaries. The corporate auditors have the statutory duty of examining the
Companys financial statements and the Companys business reports to be
submitted annually by the board of directors at the general meetings of
shareholders and of reporting their opinions to the shareholders. They also
have the statutory duty of supervising the administration by the board members
of the Companys affairs. They shall participate in the meetings of the board
of directors but are not entitled to vote. The corporate auditors constitute the board of corporate auditors. Under
The Law to Revise Part of the Commercial Code and the Law Regarding
Exceptional Rules of the Commercial Code Concerning Auditing, etc. of Stock
Corporation, the board of corporate auditors has a statutory duty to prepare
and submit its audit report to the board of directors each year. A corporate
auditor may note an opinion in the auditor report if a corporate auditors
opinion is different from the opinion expressed in the audit report. The board
of corporate auditors is empowered to establish audit principles, the method of
examination by corporate auditors of the Companys affairs and financial
position and other matters concerning the performance of the corporate
auditors duties. The Company does not have an audit committee. The amount of remuneration payable to the Companys board members as a
group and that of the Companys corporate auditors as a group in respect of a
fiscal year is subject to approval by a general meeting of shareholders. Within
those authorized amounts, the compensation for each board member and corporate
auditor is determined by the board of directors and a consultation of the
corporate auditors, respectively. The Company does not have a remuneration
committee. 
 B.   Compensation In the fiscal year ended December 31, 2003, the Company paid approximately
Yen 1,390 million, in total to Directors and Corporate Auditors. This amount
includes bonuses but excludes retirement allowances. Directors and Corporate Auditors are not covered by the Companys
retirement program. However, in accordance with customary Japanese business
practices, Directors and Corporate Auditors receive lump-sum retirement
benefits, subject to shareholder approval. The Company paid retirement benefits
aggregating Yen 95 million to two Directors during the fiscal year ended December
31, 2003. The Company does not have a stock option plan for Directors, Corporate
Auditors or any other employees. 
 C.   Board practices See Item 6A Directors and senior management and Item 6B  Compensation. 18




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##### Table of Contents



D.   Employees Following table lists the number of Canons full-time employees as of
December 31, 2003, 2002 and 2001. Total
    
    Japan
    
    Americas
    
    Europe
    
    OthersDecember 31, 2003Business machines
    
    
    68,291
    
    
    
    27,841
    
    
    
    7,801
    
    
    
    9,509
    
    
    
    23,140Cameras
    
    
    15,856
    
    
    
    4,698
    
    
    
    1,318
    
    
    
    1,006
    
    
    
    8,834Optical and other products
    
    
    13,231
    
    
    
    8,473
    
    
    
    927
    
    
    
    630
    
    
    
    3,201Corporate
    
    
    5,189
    
    
    
    4,368
    
    
    
    134
    
    
    
    162
    
    
    
    525Total
    
    
    102,567
    
    
    
    45,380
    
    
    
    10,180
    
    
    
    11,307
    
    
    
    35,700December 31, 2002Business machines
    
    
    67,782
    
    
    
    28,814
    
    
    
    7,856
    
    
    
    10,186
    
    
    
    20,926Cameras
    
    
    13,746
    
    
    
    4,360
    
    
    
    1,140
    
    
    
    1,103
    
    
    
    7,143Optical and other products
    
    
    11,552
    
    
    
    7,038
    
    
    
    1,021
    
    
    
    441
    
    
    
    3,052Corporate
    
    
    4,722
    
    
    
    4,231
    
    
    
    134
    
    
    
    159
    
    
    
    198Total
    
    
    97,802
    
    
    
    44,443
    
    
    
    10,151
    
    
    
    11,889
    
    
    
    31,319December 31, 2001Business machines
    
    
    65,244
    
    
    
    28,944
    
    
    
    10,012
    
    
    
    11,288
    
    
    
    15,000Cameras
    
    
    12,562
    
    
    
    4,314
    
    
    
    412
    
    
    
    1,154
    
    
    
    6,682Optical and other products
    
    
    10,653
    
    
    
    6,893
    
    
    
    351
    
    
    
    305
    
    
    
    3,104Corporate
    
    
    5,161
    
    
    
    4,658
    
    
    
    133
    
    
    
    128
    
    
    
    242Total
    
    
    93,620
    
    
    
    44,809
    
    
    
    10,908
    
    
    
    12,875
    
    
    
    25,028
 There was an increase of approximately 4,800 employees as of the end of
fiscal 2003 as compared to the end of fiscal 2002. This increase is mainly due
to
employment increases in the Asian region to accommodate production increases. Canon had approximately 25,200 temporary employees on average during
fiscal 2003. This number includes seasonal workers as well as temp-staff
employees such as security staff, meal service staff and janitorial staff. The Company and its subsidiaries has its own independent labor union.
Canon has not experienced a labor strike since its establishment. The Company
believes that the relationship between Canon and its labor union is good. 19




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##### Table of Contents



E.   Share ownership 
 E.   Share ownership The following table lists the number of shares owned by the directors and
corporate auditors of the Company as of March 31, 2004. The total is 208,547
shares constituting 0.02% of all outstanding shares. Name
    
    Position
    
    Number of sharesFujio Mitarai
    
    President & C.E.O.
    
    
    57,828Yukio Yamashita
    
    Senior Managing Director
    
    
    10,120Toshizo Tanaka
    
    Senior Managing Director
    
    
    11,668Kinya Uchida
    
    Senior Managing Director
    
    
    14,595Tsuneji Uchida
    
    Senior Managing Director
    
    
    4,200Yusuke Emura
    
    Managing Director
    
    
    10,733Nobuyoshi Tanaka
    
    Managing Director
    
    
    10,555Junji Ichikawa
    
    Managing Director
    
    
    7,931Hajime Tsuruoka
    
    Managing Director
    
    
    5,495Akiyoshi Moroe
    
    Managing Director
    
    
    9,855Kunio Watanabe
    
    Managing Director
    
    
    6,435Ikuo Soma
    
    Managing Director
    
    
    3,300Hironori Yamamoto
    
    Managing Director
    
    
    3,000Yoroku Adachi
    
    Director
    
    
    3,495Yasuo Mitsuhashi
    
    Director
    
    
    2,485Katsuichi Shimizu
    
    Director
    
    
    3,025Ryouichi Bamba
    
    Director
    
    
    2,000Tomonori Iwashita
    
    Director
    
    
    2,000Toshio Honma
    
    Director
    
    
    5,495Shigeru Imaiida
    
    Director
    
    
    1,535Masahiro Osawa
    
    Director
    
    
    2,495Keijiro Yamazaki
    
    Director
    
    
    1,275Shunichi Uzawa
    
    Director
    
    
    1,435Masaki Nakaoka
    
    Director
    
    
    1,000Toshiyuki Komatsu
    
    Director
    
    
    1,100Shigeyuki Matsumoto
    
    Director
    
    
    1,435Haruhisa Honda
    
    Director
    
    
    1,026Teruomi Takahashi
    
    Corporate Auditor
    
    
    6,931Kunihiro Nagata
    
    Corporate Auditor
    
    
    1,000Tadashi Ohe
    
    Corporate Auditor
    
    
    13,100Tetsuo Yoshizawa
    
    Corporate Auditor
    
    
    2,000Total
    
    
    208,547
 The Company and certain of its subsidiaries encourage its employees to
purchase shares of their Common Stock
in the market through an employees stock purchase association. 20




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##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, as amended, the
registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly
caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly
authorized. CANON INC.
(Registrant)By:
    /s/ Toshizo Tanaka(Senior Managing Director,Group Executive of Finance and
Accounting Headquarters)Canon INC.
30-2, Shimomaruko 3-chome,
Ohta-ku, Tokyo 146-8501, Japan Date:  December 22, 2004 21




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##### Table of Contents



EXHIBIT INDEX Exhibit number
    
    TitleExhibit 1.1
    
    Articles of
Incorporation of Canon Inc. (Translation)*Exhibit 1.2
    
    Regulations Of The
Board Directors of Canon Inc. (Translation)*Exhibit 2.
    
    Regulations for
Handling of Shares of Canon Inc. (Translation)*Exhibit 11.1
    
    Canon Group Code of
Conduct (Translation)*Exhibit 11.2
    
    Code of Ethics
(Supplement to The Canon Group Code of
Conduct)(Translation)*Exhibit 12.
    
    302
CertificationExhibit 13.
    
    906
Certification
   *
    
    Incorporated by reference to the corresponding exhibits to Canon Incs annual report on
Form20-F for the fiscal year ended December 31, 2003 filed on June 10, 2004. 22