THE 50TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

Transcription

1 This is a translation of the original convocation in Japanese language for convenience purposes only, and in the event of any discrepancy, the Japanese language shall prevail. NOTICE OF CONVOCATION OF THE 50TH ORDINARY GENERAL MEETING OF SHAREHOLDERS DATE AND TIME: March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time) PLACE: Headquarters of Canon Marketing Japan Inc. CANON HALL S, 3rd floor of CANON S TOWER 16-6, Konan 2-chome, Minato-ku, Tokyo Item No. 1 - Dividends from Surplus Item No. 2 - Election of Seven Directors Item No. 3 - Election of Two Audit & Supervisory Board Members Item No. 4 - Payment of Bonuses to Directors Propositions: Index NOTICE OF CONVOCATION 3 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS 7 BUSINESS REPORT 16 CONSOLIDATED FINANCIAL STATEMENTS 31 NON-CONSOLIDATED FINANCIAL STATEMENTS 33 AUDIT REPORTS 35 REFERENCE 38 Securities Code: 8060

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

3 Results Highlights Net sales (Billions of yen) Comparison with previous period 0.5% Operating income 25.1 (Figures are rounded to the nearest unit) Fiscal year (Billions of yen) Comparison with previous period 9.9% FY2013 FY2014 FY2015 FY2016 FY2017 FY2013 FY2014 FY2015 FY2016 FY2017 Ordinary income (Billions of yen) Comparison with previous period 9.7% 31.5 Profit attributable to owners of parent (Billions of yen) Comparison with previous period 13.9% 20.7 FY2013 FY2014 FY2015 FY2016 FY2017 FY2013 FY2014 FY2015 FY2016 FY2017 Profit attributable to owners of parent per share (Yen) Please see our website for more detailed business results FY2013 FY2014 FY2015 FY2016 FY2017 Canon Marketing Japan Inc. 2

4 NOTICE OF CONVOCATION TO OUR SHAREHOLDERS Securities Code: 8060 March 5, 2018 Canon Marketing Japan Inc. 16-6, Konan 2-chome, Minato-ku, Tokyo Haruo Murase Chairman & Representative Director NOTICE OF CONVOCATION OF THE 50TH ORDINARY GENERAL MEETING OF SHAREHOLDERS Notice is hereby given that the 50th Ordinary General Meeting of Shareholders of Canon Marketing Japan Inc. (the Company ) will be held as described below and that you are invited to attend the Meeting. If you do not expect to attend the Meeting, you may exercise your voting rights in writing or by the Internet, etc. After reviewing the following Reference Documents for General Meeting of Shareholders, please exercise your voting rights by no later than 5:30 p.m. on March 27 (Tuesday), 2018 (Japan time). 1. DATE AND TIME: March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time) 2. PLACE: Headquarters of the Company CANON HALL S, 3rd floor of CANON S TOWER 16-6, Konan 2-chome, Minato-ku, Tokyo 3. MATTERS CONSTITUTING THE PURPOSE OF THE MEETING Matters to be Reported: Matters to be Resolved upon: 1. Reports on the contents of the Business Report and Consolidated Financial Statements for the 50th Fiscal Year (from January 1, 2017 to December 31, 2017), and reports on the Auditing Results of Accounting Auditor and Audit & Supervisory Board regarding the Consolidated Financial Statements. 2. Reports on the content of the Non-Consolidated Financial Statements for the 50th Fiscal Year (from January 1, 2017 to December 31, 2017). Propositions: Item No. 1 - Dividends from Surplus Item No. 2 - Election of Seven Directors Item No. 3 - Election of Two Audit & Supervisory Board Members Item No. 4 - Payment of Bonuses to Directors 3 Canon Marketing Japan Inc.

5 Reference Documents For General Meeting of Shareholders Reference Business Report Consolidated Financial Statements Financial Statements Audit Reports Notice of Convocation 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. The following items are posted on the Company s website ( in accordance with the related laws and regulations and Article 14 of the Company s Articles of Incorporation and are therefore not included in the documents attached to this Notice: (1) Systems for Ensuring Appropriateness of Business Operations and Outline of Implementation Activities to be described in the Business Report (2) Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements (3) Non-Consolidated Statement of Changes in Net Assets and Notes to Non-Consolidated Financial Statements Items (1) through (3) above are part of the Business Report, Consolidated Financial Statements and Non- Consolidated Financial Statements, which Audit & Supervisory Board Members audited to prepare their audit reports, and item (2) above are part of Consolidated Financial Statements and item (3) above are part of Non-Consolidated Financial Statements, which Accounting Auditor audited to prepare its audit reports. Any revisions to the Reference Documents for General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-Consolidated Financial Statements will be posted on the company s website on the Internet ( Canon Marketing Japan Inc. 4

6 NOTICE OF CONVOCATION Guidance Notes on the Exercise of Voting Rights Your voting rights to be exercised at the General Meetings of Shareholders are important rights. After reviewing the following Reference Documents for the General Meeting of Shareholders (pages 7-15), please exercise your voting rights. The Voting rights can be exercised in one of the following three ways. Please bring and present the enclosed Voting Form to the receptionist at the place of the Meeting. Exercise of Voting Rights by Attending the Meeting DATE AND TIME: PLACE: March 28 (Wednesday), 2018 at 10:00 a.m. (Japan time) Headquarters of the Company CANON HALL S, 3rd floor of CANON S TOWER 16-6, Konan 2-chome, Minato-ku, Tokyo Exercise of Voting Rights in Writing (Via Postal Mail) Please indicate your for/against for each of the propositions on the enclosed Voting Form and return it by postal mail. Deadline for exercising voting rights: The Voting Form must reach us no later than 5:30 p.m. on March 27 (Tuesday), 2018 (Japan time) Exercise of Voting Rights by Electromagnetic Means (Via the Internet) Please enter your for/against for each of the propositions on the website for the exercise of voting rights ( and send it. Deadline for exercising voting rights: The exercise of voting rights must be made no later than 5:30 p.m. on March 27 (Tuesday), 2018 (Japan time) Guidance Notes on the Exercise of Voting Rights via the Internet, etc. I. Exercise of voting rights via the Internet 1. Items Required to be Agreed on for the Exercise of Voting Rights via the Internet (1) You may exercise your voting rights via the Internet only through the website for exercising voting rights specified by the Company ( When exercising your voting rights via the Internet, the code for the exercise of voting rights and the password described at the bottom right of the enclosed Voting Form are required. (2) The code for the exercise of voting rights and the password are only valid for this Meeting. At the time of the next meeting, new code and password will be issued. (3) If you exercise your voting rights both, in writing and via the Internet, regardless of the time of arrival, we will treat the exercise of your voting rights via the Internet as effective. 5 Canon Marketing Japan Inc.

7 (4) If you exercise your voting rights more than once via the Internet, we will treat the last exercise of your voting rights as effective. (5) The cost of Internet access (access fees to providers, telecommunications fees, etc.) shall be borne by the shareholders. (6) Please note that you may not be able to exercise your voting rights via the Internet depending on your Internet environment. In addition, please note that you cannot exercise your voting rights via the Internet by a mobile phone. 2. Specific Procedures to Exercise Your Voting Rights via the Internet (1) Access the website ( (2) Enter the code for the exercise of voting rights and the password described on the enclosed Voting Form and click on the Log-in button. (3) Exercise your voting rights by following the directions on the screen no later than 5:30 p.m. on March 27 (Tuesday), 2018 (Japan time). 3. Security You may exercise your voting rights safely due to the encryption technology(sha-2) used to protect your voting information from being leaked or tampered with. The code for the exercise of voting rights and the password described on the voting form are very important to authenticate shareholders, so please ensure that you do not disclose them to others. Please note that the Company does not make any inquiries regarding your password. 4. Contact Information for Inquiries (1) For inquiries with respect to the operation of personal computer to exercise of the voting rights via the Internet. Please contact: Internet Help Dial: Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd. Telephone: (toll-free) Operating Hours: 9:00 a.m. to 9:00 p.m. (excluding Saturdays, Sundays and national holidays) (2) For inquiries other than the (1) above, such as address change, etc. Please contact: Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd. Telephone: (toll-free) Operating Hours: 9:00 a.m. to 5:00 p.m. (excluding Saturdays, Sundays and national holidays) II. Platform for Electronic Exercise of Voting Rights 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. Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 6

8 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS Item No. 1: Dividends from Surplus We have comprehensively considered the business results, etc. for this Fiscal Year, and propose a year-end dividends as described below. Thus, the full-year dividends will be yen per share, which includes interim dividends of 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: yen per common share of the Company Total amount of dividend 4,538,396,065 yen 3 Effective date of the dividend from surplus: March 29, Canon Marketing Japan Inc.

9 Item No. 2: Election of Seven Directors The term of offices of all of the ten Directors will expire at the end of this Meeting. Accordingly, we would like to revise the structure of the Board of Directors due to the transition to a new organizational structure and elect seven Directors. The candidates for the position of the Directors are as follows: Candidate No. Name Present Position and Areas of Responsibility at the Company Notice of Convocation Reference Documents For General Meeting of Shareholders Masahiro Sakata Yutaka Usui Yoshiyuki Matsusaka President & Representative Director and Executive President Director & Senior Vice President Director in charge of Group CSR, Group General Administration & Human Resources Management, Group Legal and Intellectual Property, Group Procurement, and Group Logistics Director & Senior Vice President Director in charge of Group Planning, Group Communications, and Deputy General Manager of Marketing Headquarters Reappointment Reappointment Reappointment Business Report Consolidated Financial Statements 4 Masachika Adachi Director & Senior Vice President Director in charge of BPO Functional Unit and Enterprise Business Unit Reappointment Financial Statements 5 6 Shiro Hamada Akio Dobashi Director & Vice President Director in charge of Group Accounting and Group Auditing Outside Director Reappointment Reappointment Outside Independent Audit Reports 7 Yoshio Osawa New Appointment Outside Independent Reference Canon Marketing Japan Inc. 8

10 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS Candidate No. Name (Date of birth) (Number of the Company s shares held) Brief personal record, position, business in charge and important concurrent posts 1 Masahiro Sakata As of Apr. 1977: Entered the Company Mar. 2006: Director Mar. 2009: Managing Director Mar. 2011: Director & Senior Vice President Mar. 2013: Director & Senior Vice President Apr. 2013: Company President of Business Solution Company Mar. 2015: President & Representative Director and Executive President (present) (Apr. 11, 1953) (27,200 shares) <Reason for Nomination as Director> Mr. Sakata led the Business Solution business for many years. He has managed the Company as the President & Representative Director, and has considerable experience, knowledge of management for the Company and excellent expertise. Thus, he has again been selected as a candidate for a Director. 2 Yutaka Usui (Nov. 29, 1953) (17,400 shares) As of Apr. 1977: Entered Canon Inc. Mar. 2007: Director Mar. 2011: Senior Vice President Mar. 2014: Director (present) Apr. 2015: Director in charge of CSR Headquarters and General Administration & Human Resources Management Headquarters (present) Mar. 2016: Senior Vice President (present) Apr. 2016: Director in charge of Legal and Intellectual Property Headquarters, Procurement Headquarters, and Logistics Center (present) Jan. 2018: Director in charge of Group CSR, Group General Administration & Human Resources Management, Group Legal and Intellectual Property, Group Procurement, Group Logistics (present) <Reason for Nomination as Director> Mr. Usui led the Human Resources field for many years. He has overseen a number of different management headquarters at head office, and has considerable experience and knowledge of management for the Company. Thus, he has again been selected as a candidate for a Director. 9 Canon Marketing Japan Inc.

11 Candidate No. Name (Date of birth) (Number of the Company s shares held) Brief personal record, position, business in charge and important concurrent posts Notice of Convocation 3 Yoshiyuki Matsusaka (Nov. 12, 1956) (14,457 shares) As of Apr. 1979: Entered the Company Mar. 2013: Vice President Mar. 2015: Director & Senior Vice President (present) Apr. 2015: Director in charge of Communications Headquarters Jul. 2016: Director in charge of Corporate Planning Headquarters Jan. 2018: Director in charge of Group Planning and Corporate Planning Headquarters (present) Feb. 2018: Director in charge of Group Communications (present) Deputy General Manager of Marketing Headquarters (present) <Reason for Nomination as Director> Mr. Matsusaka led Corporate Planning field and Public Relations field for many years. He has held the posts of Director and Executive Officer, and has considerable experience and knowledge of management for the Company. Thus, he has again been selected as a candidate for a Director. Reference Documents For General Meeting of Shareholders Business Report 4 Masachika Adachi (Mar. 30, 1960) (7,942 shares) As of Apr. 1982: Entered the Company Jul. 2009: Group Executive of MA Business Sales Headquarters, Business Solutions Company Mar. 2013: Vice President Mar. 2015: Director & Senior Vice President (present) Apr. 2015: Company President of Business Solutions Company Jan. 2018: Director in charge of BPO Functional Unit (present) Director in charge of Enterprise Business Unit (present) <Reason for Nomination as Director> Mr. Adachi led the Business Solution business for many years. He has held the posts of Director and Executive Officer, and has considerable experience and knowledge of management for the Company. Thus, he has again been selected as a candidate for a Director. Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 10

12 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS Candidate No. Name (Date of birth) (Number of the Company s shares held) Brief personal record, position, business in charge and important concurrent posts 5 Shiro Hamada As of Apr. 1984: Entered the Company Apr. 2011: Deputy Chief Executive of Administrative Headquarters of Canon IT Solutions Inc. Jul. 2013: Group Executive of Accounting Headquarters (present) Apr. 2015: Executive Officer Mar. 2016: Director & Vice President (present) Jan. 2018: Director in charge of Group Accounting and Group Auditing (present) (Aug. 31, 1961) (6,252 shares) <Reason for Nomination as Director> Mr. Hamada led the Finance and Accounting field for many years. He has held the posts of Director and Executive Officer, and has considerable experience and knowledge of management for the Company. Thus, he has again been selected as a candidate for a Director. 6 Akio Dobashi (Jan. 2, 1949) (0 shares) Outside Independent As of Apr. 1972: Entered Nichimen Company, Limited (presently Sojitz Corporation) Apr. 2004: Representative Director, President & CEO of Sojitz Corporation Jun. 2005: Representative Director, President & CEO of Sojitz Holdings Corporation Oct. 2005: The corporate name was changed to Sojitz Corporation due to the merger of Sojitz Holdings Corporation and Sojitz Corporation Representative Director, President & CEO of Sojitz Corporation Apr. 2007: Representative Director and Chairman of Sojitz Corporation Apr. 2012: Director of Sojitz Corporation Jun. 2012: Senior Corporate Advisor of Sojitz Corporation Jun. 2014: Corporate Advisor of Sojitz Corporation (present) Jun. 2015: Outside Director of OSJB Holdings Corporation Mar. 2016: Outside Director of the Company (present) Jun. 2017: Outside Director of Maeda Corporation (present) <Important concurrent post> Outside Director of OSJB Holdings Corporation <Reason for Nomination as Outside Director> Mr. Dobashi has actively performed as a top executive at a general trading company for many years. He has considerable experience and excellent expertise in company management. We assessed that he could accomplish the duties as the Outside Director appropriately from such experience and excellent expertise. Thus, he has again been selected as a candidate for an Outside Director. His term as an Outside Director will be two years as of the close of this Meeting. 11 Canon Marketing Japan Inc.

13 Candidate No. Name (Date of birth) (Number of the Company s shares held) Brief personal record, position, business in charge and important concurrent posts Notice of Convocation 7 Yoshio Osawa (Jan. 22, 1952) (0 shares) New Appointment Outside Independent As of Apr. 1975: Entered Sumitomo Corporation Jun. 2003: Concurrent post as director of Sumitomo Computer Service Corporation (presently SCSK Corporation)orporation Apr. 2005: Executive Officer of Sumitomo Corporation Apr. 2008: Managing Executive Officer of Sumitomo Corporation Jun. 2008: Representative Director and Managing Executive Officer of Sumitomo Corporation Apr. 2011: Representative Director and Senior Managing Executive Officer of Sumitomo Corporation Apr. 2013: Representative Director, Assistant to President and CEO of Sumitomo Corporation, Adviser of SCSK Corporation Jun. 2013: Representative Director, President & COO of SCSK Corporation Apr. 2015: President and Representative Director SCSK Corporation Apr. 2016: Chairman of the Board of the Directors, SCSK Corporation Apr. 2017: Outside Director of SCSK Corporation <Reason for Nomination as Outside Director> Mr. Yoshi Osawa has actively performed as a top executive at a general trading company and IT services company for many years. He has considerable experience and excellent expertise in company management. On this basis, we assessed that he could accomplish the duties of outside director appropriately. Thus, he has been newly selected as a candidate for an Outside Director. Reference Documents For General Meeting of Shareholders Business Report Financial Statements Reference Audit Reports Consolidated Financial Statements Notes: 1. None of the candidates for the Directors have any special interest in the Company. 2. Should Mr. Akio Dobashi and Mr. Yoshio Osawa be elected, the Company will make both of them independent directors under the regulation of the Tokyo Stock Exchange, Inc. They both meet the Company s Independence Standards for Independent Directors/Audit & Supervisory Board Members (Please see page 14). 3. The Company has entered into a contract with Mr. Akio Dobashi limiting the amount of his damages compensation liability defined in Paragraph1, Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should he be elected, the Company will continue the aforementioned contract with him. Should Yoshio Osawa be elected, the Company will also enter into a contract to limit liability with him under the same terms. Canon Marketing Japan Inc. 12

14 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS Item No. 3: Election of Two Audit & Supervisory Board Members The term of offices of Audit & Supervisory Board Members Mr. Fumio Ogaki and Mr. Shigeo Hasegawa will expire at the end of this Meeting. We would like you to elect two Audit & Supervisory Board Members. Further note that prior consent has been obtained from the Audit & Supervisory Board concerning the submission of this item. The candidates for the Audit & Supervisory Board Members are as follows: Candidate No. Name (Date of birth) (Number of the Company s shares held) Brief personal record, position and important concurrent posts 1 Shinichi Inoue As of Apr. 1983: Entered Canon Inc. Jan. 2003: Group Executive of Distribution Company Mar. 2008: Director Mar. 2011: Vice President Mar. 2012: Director of Canon IT Solutions Inc. (present) Mar. 2013: Senior Vice President (present) Mar. 2014: Senior Vice President of Canon IT Solutions Inc. (present) (Feb. 22, 1958) (9,200 shares) New Appointment <Reason for Nomination as Audit & Supervisory Board Members> Mr. Shinichi Inoue has been involved with the management of Canon and its Group companies for many years, and based on this experience and expertise, we assessed that he could accomplish the duties as an Audit & Supervisory Board Member appropriately. Thus, he has been newly selected as a candidate for Audit & Supervisory Board Member. 2 Shigeo Hasegawa As of Jul. 1980: Registered as certified public accountant Jan. 2006: Group Manager of Global Services Group at Deloitte Touche Tohmatsu (presently Deloitte Touche Tohmatsu LLC) Jun. 2010: Leader of IFRS Center of Excellent at Deloitte Touche Tohmatsu LLC Apr. 2012: Specially-appointed professor, Chuo Graduate School of International Accounting, Chuo University (present) Mar. 2014: Outside Audit & Supervisory Board Member (present) (Jan. 1, 1952) (2,000 shares) Outside Independent <Reason for Nomination as Outside Audit & Supervisory Board Members> Although Mr. Shigeo Hasegawa does not have experience in the direct management of companies, he has extensive experience and expertise in company accounting as a certified public accountant, and on this basis we assessed that he could accomplish the duties as an Outside Audit & Supervisory Board Member appropriately. Thus, he has again been selected as a candidate for Outside Audit & Supervisory Board Member. His term as Audit & Supervisory Board Member will be four years as of the close of this Meeting. 13 Canon Marketing Japan Inc.

15 Notes: 1. None of the candidates for the Audit & Supervisory Board Members have any special interest in the Company. 2. Should Mr. Shigeo Hasegawa be elected, the Company will make him independent director under the regulation of the Tokyo Stock Exchange, Inc. He meets the Company s Independence Standards for Independent Directors/Audit & Supervisory Board Members (Please see page 14). 3. The Company has entered into a contract with Mr. Shigeo Hasegawa limiting the amount of his damages compensation liability defined in Paragraph1, Article 423 of the Companies Act of Japan to the limit prescribed by laws and regulations. Should he be elected, the Company will continue the aforementioned contract with him. Should Shinichi Inoue be elected, the Company will also enter into a contract to limit liability with him under the same terms. (Reference) Independence Standards for Independent Directors/Audit & Supervisory Board Members of Canon Marketing Japan Inc. 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). 1. A person/organization for which Canon Marketing Japan Group (Canon Marketing Japan Inc. and its 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 3. A person/organization receiving large amounts of contributions from Canon Marketing Japan Group, or an executing person of such organization 4. A consultant, accounting professional or legal professional who has received a large amount of money or other properties from Canon Marketing Japan Group, other than as compensation for being a Director/Audit & Supervisory Board Member (if the recipient is a corporation, partnership or any other organization, this item applies to any person belonging to said organization.) 5. A certified public accountant belonging to the audit firm engaged to conduct the statutory audit of Canon Marketing Japan Group (including any such accountant to whom this item has applied in the last 3 fiscal years) 6. An executing person of another company in cases where an executing person of Canon Marketing Japan Inc. is an outside director/audit and Supervisory Board Member of such other company 7. An immediate family member (spouse and a relative within the second degree of kinship) of any of the persons listed in each of items 1 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 2% of the consolidated sales of Canon Marketing Japan Group or such client. * In item 2, a large shareholder means a shareholder who directly or indirectly holds 5% or more of the total voting rights of Canon Marketing Japan Inc. * In item 3, a large amount means in cases where the total amount of contributions exceeds 12 million (in cases where the recipient is an individual) or 1% of the annual gross income of such recipient (in cases where the recipient is an organization), for any fiscal year during the last 3 fiscal years of Canon Marketing Japan Inc. * In items 1 to 3 and 6, an executing person means an executive director, executive officer and employee including manager (in items 1 to 3, including a person to whom this item has applied in any fiscal year during the last 3 fiscal years). * In item 4, a large amount means in cases where the total amount of money or other properties received by said consultant, etc., exceeds 12 million (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). Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 14

16 REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS Item No. 4: Payment of Bonuses to Directors It is proposed that bonuses will be paid to the eight Directors excluding the Outside Director as of the end of this fiscal year, in appreciation of their services during this fiscal year, which totals 78,500,000 considering the results for this fiscal year, etc. 15 Canon Marketing Japan Inc.

17 (Documents provided in accordance with Articles 437 and 444 of the Companies Act of Japan) BUSINESS REPORT (January 1, 2017 to December 31, 2017) 1. Current Conditions of Canon Marketing Japan and its consolidated subsidiaries (the Group ) (1) Business Progress and Achievement General Business Conditions Looking back at the Japanese economy over this Year, productivity through improved operational efficiency and consumer spending and capital investment has picked up, cut overheads, enabling us to achieve operating income of and the economy has made a mild recovery. 30,406 million (up 9.9%) and ordinary income of 31,491 Against this economic backdrop, although sales of million (up 9.7%). Profit attributable to owners of parent came interchangeable lens digital cameras and inkjet printers have to 20,679 million (up 13.9%). fallen short of their performance in the previous year, as a Starting with this Year, changes have been made to the result of strong performance in IT solutions and industrial operational categories of our Group companies in connection equipment, we recorded net sales of 632,189 million (up with an internal Group reorganization. For this reason, 0.5% from the previous year). comparisons and analyses of the Year will be made based on In terms of income meanwhile, we maintained steady the new categories. figures for more profitable services and solutions, increased Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Constitution of Sales by Operations Industrial/Medical 5% Net sales 34,308 million Financial Statements Imaging Systems 23% Net sales 152,339 million Business Solutions 51% Net sales 338,145 million Audit Reports IT Solutions 21% Net sales 134,896 million Reference Canon Marketing Japan Inc. 16

18 BUSINESS REPORT Business Conditions by Operation Business Solutions Net sales Operating income 338,145 million 12,238 million Business Solutions imagerunner ADVANCE C3530F In the domestic market for core products in the business solutions segment, shipments of office multifunctional printers (MFPs) were down compared with the previous year due to a general slump in demand across the market. Demand was also sluggish for laser printers among the private and public sectors, with shipments similarly down from the previous year. As for the Group, we have made efforts to acquire new customers with the release of the imagerunner ADVANCE C3500 series as our flagship line of color office MFPs for small and medium-sized companies. In addition, we received large orders from major companies, bringing sales higher than the previous year. In the production printing business, we sell production MFPs, continuous feed printers, large-format inkjet printers and other such products aimed at markets including commercial printing, in-house printing and critical record printing, as well as offering services and support. This year, cut sheet printers such as the imagepress C850/C650 maintained healthy sales among regular offices and the printing industry, but due to a delay in shipments of our new continuous feed printer product, sales slipped below from the previous year. For laser printers, although there has been a continuing decline in shipments due to consolidation into MFPs at regular offices, sales were up over the previous year due to multiple large orders and expanded sales to specific industries, which has been an area of focus. Sales of toner cartridges also rose over the previous year due to specified industries printing large volumes and expanded shipments to customers in the financial and public sectors. In the network camera business, we sell devices for a wide variety of purposes, including security and marketing, as well as providing services and support. This year, we undertook major projects for commercial facilities and combined products from Axis Communications AB and Milestone Systems A/S to secure orders across a wide range of fields and surpass sales of the previous year. While print volumes rose steadily in part due to an increase in the number of devices in operation in the market, maintenance service fees continue to fall, resulting in slightly lower sales compared with the previous year in the area of maintenance services for office MFPs and other such products. imagepress C850 As a result, net sales in this segment totaled 338,145 million (up 1.1% from the previous year), with operating income coming in at 12,238 million (up 1.5%). 17 Canon Marketing Japan Inc.

19 Business Conditions by Operation IT Solutions IT Solutions The domestic IT solution market performed strongly overall this year, with improving economic conditions driving expanded IT investment in the financial and manufacturing sectors, affecting small, medium and large-sized companies. <SI Services Business> In terms of our SI services business, we develop systems from scratch or use solution packages to suit customers individual needs. Net sales were up from the previous year due to a hike in orders from the financial sector and academic institutions. <IT Infrastructure and Services Business> In terms of our IT infrastructure and services business, we provide data center services, cloud-related services, system platform construction services, and system operating services. Net sales climbed above the previous year thanks to strong performance from our data center services. <Embedded Systems Business> In terms of our embedded systems business, we develop software that is designed to be embedded in products. In this year the embedded business produced strong performance in applications for the automotive industry, but sales fell from the previous year due to fewer projects for principal customers in the manufacturing sector. <Products Business> In terms of our product business, we sell IT-related hardware, package software and licenses. Sales were up over the previous year on the back of brisk performance with securityrelated products such as ESET as well as IT products. Net sales Operating income 134,896 million 4,559 million ESET security software As a result, net sales in this segment totaled 134,896 million (up 4.7% from the previous year), with operating income coming in at 4,559 million (up 14.5%). Net sales for this segment include 27,528 million from internal sales or transfers between segments. Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Nishi-Tokyo Data Center Reference Canon Marketing Japan Inc. 18

20 BUSINESS REPORT Business Conditions by Operation Imaging Systems Net sales Operating income 152,339 million 11,688 million Imaging Systems <Digital Cameras> In the domestic market for interchangeable lens digital cameras, while mirrorless cameras sold well, demand was sluggish for SLR cameras, and shipments of interchangeable lens digital cameras was down from the previous year. We released the EOS M100 as the entry-level mirrorless camera in October last year and actively targeted promotions at younger demographics. As a result, mirrorless camera sales far surpassed the previous year. EOS M100 On the other hand, while sales of mid-range SLR cameras were up from the previous year, mainly due to the EOS 6D Mark II released in August, sales of entry-level models decreased, in part due to the ongoing shift to mirrorless EOS 6D Mark II cameras, with total sales for interchangeable lens digital cameras falling short of the previous year. Shipments of compact digital cameras on the domestic market rose from the previous year as production rebounded from the supply shortages stemming from to the Kumamoto Earthquake in In addition to this rebound, high-priced models also performed strongly, with sales surpassing those of the previous year. <Inkjet Printers> A sluggish market for inkjet printers placed downward pressure on shipments, and sales were down from the previous year as a result. Sales of inkjet cartridges were down on the previous year, due to a decline in printing volumes and other factors. <Commercial Imaging Equipment> Net sales were down from the previous fiscal year as a result of sluggish shipments of broadcast lenses, due in part to a decline in orders from broadcasters. As a result, net sales for this segment totaled 152,339 million (down 4.3% on the previous year), with operating income coming in at 11,688 million (up 7.4%). 19 Canon Marketing Japan Inc.

21 Business Conditions by Operation Industrial/Medical <Industrial> Industrial/Medical For industrial equipment, the ongoing boom in semiconductor-related markets resulting in considerable sales growth over the previous year for semiconductor manufacturing equipment, inspection and measurement equipment, maintenance services and so on. Businesses outside semiconductor-related markets also performed strongly, with sales up on the previous year. <Medical> In the medical segment, we made progress in strengthening the medical solutions business and promoting reforms to the business structure, but sales were down from the previous year due to weaker sales of X-ray film and pharmaceutical dispensing products. Net sales Operating income As a result, net sales for this segment totaled 34,308 million (up 6.5% on the previous year), with operating income coming in at 1,543 million (up 731.3%). 34,308 million 1,543 million Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference (2) Capital Expenditures Semiconductor manufacturing equipment The capital expenditures by the Group during this fiscal year totaled 12,284 million, which are mainly as rented assets, tools, fixtures and fittings, and ancillary facilities at our Nishi-Tokyo Data Center. Canon Marketing Japan Inc. 20

22 BUSINESS REPORT (3) Issues to be Addressed We expect the Japanese economy to continue its mild recovery as consumer spending and capital investment improve. However, we also expect that future prospects will continue to be unclear due to uncertainty in overseas economies, the impact of fluctuations in in financial and capital markets, and other factors. Against this economic backdrop, our top priority as the Group is to build on our various strengths, including our strong customer base, our range of highly competitive Canon products, and our IT capabilities, to expand our business domain even further. To achieve that, we have made it our Group Mission under our Long-Term Management Objectives Phase III (2016 to 2020) to help resolve social issues with advanced imaging & IT solutions, and are committed to expanding our business based on our Group Vision; the Canon Marketing Japan Group understands it s custormers and grows with its customers. In addition, to achieve the basic policies of our Long-Term Management Objectives Phase III, starting January 1, 2018, we transitioned to a new organizational structure from the existing one based on products and sales channels to one based on markets and customers. Specifically, the new structure comprises four business units: the Consumers Business Unit targeting individual consumers, the Enterprise Business Unit which handles large enterprises as its main customers, the Area Business Unit which will cover small and mid-sized firms around Japan, and the Professional Business Unit, which handles customers in the specialized fields through the Production Printing, Industrial Equipment, Healthcare and Video Solutions sub-segments. Customer Individuals Business / Office Specialist Fields Business Unit Functional Unit Supervisory Division Consumers Enterprise (Large Customers) BPO IT Platform Call Centers / Services Marketing Supervision Service & Support Supervision Area (Small-to- Medium-Sized Customers) Professional Production Printing Industrial Equipment Healthcare Imaging Solutions BPO 21 Canon Marketing Japan Inc.

23 Through this new structure, we will make every effort to shift to growth and enhance profitability with stronger ties with customers in each market and providing greater value. <Shift to Growth> (1) Accelerate the speed of growth by shifting Group resources to businesses with high growth potential (2) Expand operations and supplement functions by making active use of M&A and alliances (3) Create and expand new businesses by investing in startups and running business creation programs <Enhanced Profitability> (1) Reduce SG&A expenses through fundamental structural reforms (thorough revisions of business processes, consolidation and elimination of call centers, Group optimization of after sales services and personnel restructuring, etc.) (2) Raising productivity in existing businesses (improving market share of mirrorless cameras, improving the percentage of genuine ink cartridges, achieving leading market share in MFPs shipments, maintaining unit prices of maintenance fees, raising laser printer maintenance subscriptions, etc.) Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report We will endeavor to expand our operations and enhance business performance by promoting these priority strategies. Three-Year Management Plan Consolidated Financial Targets Net sales Operating income Ordinary income (Billion yen) (Billion yen) (Billion yen) 1, Actual Three-Year Management Plan target Actual Three-Year Management Plan target Profit margin Actual Changes Changes Profit margin 5.3% 800 Changes +5.9% +5.4% 40 Profit margin Profit margin 5.1% Profit margin +2.0% % 4.8% % Profit attributable to owners of parent Profit attributable to owners of parent per share ROE* (totals rounded to the nearest unit) (Billion yen) (Yen) (%) Actual Three-Year Management Plan target Actual Actual Three-Year Management Plan target Three-Year Management Plan target Profit margin 3.3% 20.7 Profit margin 3.4% 21.7 Profit margin 3.5% 24.2 Profit margin 3.6% Three-Year Management Plan target Profit margin Profit margin 5.1% 5.1% Profit margin 5.4% Consolidated Financial Statements Financial Statements Audit Reports Reference * ROE: Return on Equity, used as in indicator of how much a company makes as a result of money invested by its shareholders Canon Marketing Japan Inc. 22

24 BUSINESS REPORT (4) Status of Assets and Earnings Consolidated Net sales (Millions of yen) Operating income (Millions of yen) Ordinary income (Millions of yen) Profit attributable to owners of parent (Millions of yen) Profit attributable to owners of parent per share (yen) Total assets (Millions of yen) Net assets (Millions of yen) 46th Fiscal Year (Jan. 1, 2013 to Dec. 31, 2013) 47th Fiscal Year (Jan. 1, 2014 to Dec. 31, 2014) 48th Fiscal Year (Jan.1, 2015 to Dec.31, 2015) 49th Fiscal Year (Jan. 1, 2016 to Dec. 31, 2016) 50th Fiscal Year (Jan. 1, 2017 to Dec. 31, 2017) 657, , , , ,189 17,012 25,087 26,647 27,676 30,406 18,210 26,553 28,040 28,717 31,491 10,167 16,030 15,670 18,161 20, , , , , , , , , , ,522 Note: Profit attributable to owners of parent per share is calculated based on the weighted average number of outstanding shares during the year. (5) Main Business Segment Business Solutions IT Solutions Imaging Systems Industrial/Medical Major Products / Services Office MFPs, Small Office MFPs, Production MFPs, Continuous Feed Printers, Laser Printers, Large-Format Inkjet Printers, Office-use Facsimiles, Liquid Crystal Projectors, Document Scanners, Industrial Printers, Teleconference System, Network Cameras, Document Solutions, Maintenance Services SI Services Business, IT Infrastructure and Services Business, Embedded Systems Business(development of software that is embedded in products), Products Business Digital Cameras, Interchangeable Lenses, Digital Camcorders, Inkjet Printers, Compact Photo Printers, Personal Scanners, Calculators, Commercial Imaging Equipment Semiconductor Manufacturing Equipment, Tasting and Measuring Systems, 3D Printers, Digital Radiography Systems (Digital X-ray Cameras), Ophthalmic Equipment, Medical Systems, Sterilization Products, Packaging Machines 23 Canon Marketing Japan Inc.

25 (6) Main Location of Operations The Company Principal Subsidiaries Notice of Convocation Headquarters Konan Office Makuhari Office Sapporo Branch Sendai Branch Nagoya Branch Osaka Branch Hiroshima Branch Tokyo Chiba Hokkaido Miyagi Aichi Osaka Hiroshima Canon System & Support Inc. Canon Production Printing Systems Inc. Canon IT Solutions Inc. Canon Lifecare Solutions Inc. Tokyo Reference Documents For General Meeting of Shareholders Business Report Fukuoka Branch Fukuoka (7) Employees Consolidated Number of Employees Change from the end of the previous year 17,647 persons Decrease of 240 persons from the previous year Consolidated Financial Statements Financial Statements Audit Reports Reference Segment Number of Employees Change from the end of the previous year Business Solutions 9,709 persons Increase of 72 persons from the previous year IT Solutions 4,552 persons Decrease of 681 persons from the previous year Imaging Systems 1,276 persons Decrease of 214 persons from the previous year Industrial/Medical 717 persons Increase of 138 persons from the previous year Other 1,393 persons Increase of 445 persons from the previous year Canon Marketing Japan Inc. 24

26 BUSINESS REPORT (8) Parent Company and Principal Subsidiaries Parent Company Parent Company Name Location Activities Number of Voting Rights (Ratio of Voting Rights) Relation with the Company Canon Inc. Ohta-ku Tokyo Development and production in the field of the office, imaging systems and industrial equipment 757,086 (58.5%) The Company is comprehensively conducting to sales, services and marketing of the products manufactured by the Parent Company in the Japan market. Matters about the Transactions with Parent Company, etc. The Company holds the exclusive right to sell within Japan all products, excluding semiconductor exposure devices and liquid crystal substrate exposure devices, manufactured by Parent Company under the Canon brand. In purchasing such products, the terms are negotiated and determined for each year by presenting the preferred prices from the Company taking into account market prices. The Company sells consumables for office equipment to the Parent Company based on the same terms as regular transactions. The Company lends funds to the Parent Company by the interest rates determined reasonably taking into account market rates. Thus, the board of directors assesses that the Company is conducting business activities and making management decisions based on the Company s own management judgments, certain independence from the Parent Company is secured, and the Company s profit is not harmed in the transactions with the Parent company. Principal Subsidiaries Company Name Capital Stock Ratio of Voting Rights (millions of yen) of the Company (%) Business Canon System & Support Inc. 4, Consulting, sales, support and maintenance services for Canon products and the IT solutions of other companies Canon Production Printing Systems Inc. 2, Sales of production printing equipment and consumables, maintenance service, development and provision of workflow systems, etc. and printing service, etc. Canon IT Solutions Inc. 3, SI and consulting, IT service and development and sale of various softwares Canon Lifecare Solutions Inc. 2, Sales of medical equipment, healthcare related equipment and consumables and medical image systems Consolidated Status 1. The number of consolidated subsidiaries was Canon IT Solutions Inc. and Canon Software Inc., both the subsidiaries of the Company were merged into Canon IT Solutions Inc. on July 1, Canon Marketing Japan Inc.

27 2. Status of Shares of the Company (1) Total Number of Shares Authorized 299,500,000 shares (2) Total Number of Issued Shares, Capital Stock, Number of Shareholders As of the end of the Previous Year Change during This Year As of the end of This Year Total number of issued shares (shares) 151,079, ,079,972 Capital stock (yen) 73,303,082,757-73,303,082,757 Number of shareholders (persons) 13,170 Decrease of 1,982 11,188 (3) Major Shareholders Name of Shareholders Number of Shares Held (thousands of shares) Shareholding Ratio (%) Canon Inc. 75, Canon Marketing Japan Group Employee Stock Ownership Association 5, The Master Trust Bank of Japan, Ltd. (Trust account) 2, Japan Trustee Services Bank, Ltd. (Trust account) 1, Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements STATE STREET BANK AND TRUST COMPANY , GOVERNMENT OF NORWAY 1, Canon Marketing Japan Group Business Partner Stock Ownership Association 1, Japan Trustee Services Bank, Ltd. (Trust account 5) 1, Mizuho Bank, Ltd. 1, The Dai-ichi Life Insurance Company, Limited Notes: 1. The Company possesses 21,411,513 shares of its treasury shares (14.2% of the total number of issued shares). 2. The shareholding ratio is calculated by deducting the number of treasury shares from the total number of issued shares. (4) Shareholding Ratio by Category Financial institutions 9.3% Securities companies 0.6% Other domestic companies 51.2% Foreign companies, etc. 13.3% Individuals and others 11.4% Treasury shares 14.2% Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 26

28 BUSINESS REPORT 3. Status of Directors and Audit & Supervisory Board Members (1) Directors and Audit & Supervisory Board Members Position Name Business in Charge or Important Concurrent Posts Chairman & Representative Director President & Representative Director Executive President Director Senior Vice President Haruo Murase Masahiro Sakata Yutaka Usui Director in charge of CSR Headquarters, General Administration & Human Resources Management Headquarters, Legal and Intellectual Property Headquarters, Procurement Headquarters, and Logistics Center Director Senior Vice President Koichi Yagi Company President of Imaging Systems Company Director Senior Vice President Director Senior Vice President Akihisa Kamimori Yoshiyuki Matsusaka Company President of ITS Company, President & Representative Director of Canon IT Solutions Inc. Director in charge of Video Solutions Co-creation Project, Corporate Planning Headquarters and Brand Communications Headquarters Director Senior Vice President Masachika Adachi Company President of Business Solution Company Director Vice President Shiro Hamada Group Executive of Accounting Headquarters Director Norihisa Doi Director Akio Dobashi Outside Director of Maeda Corporation Audit & Supervisory Board Member Audit & Supervisory Board Member Audit & Supervisory Board Member Audit & Supervisory Board Member Audit & Supervisory Board Member Masahiro Shimizu Fumio Ogaki Shigeo Hasegawa Kunihiko Tedo Nobuyasu Kusumi Notes: 1. Mr. Norihisa Doi and Mr. Akio Dobashi all of whom are Directors are Outside Directors. 2. Mr. Shigeo Hasegawa, Mr. Kunihiko Tedo and Mr. Nobuyasu Kusumi all of whom are Audit & Supervisory Board Members are Outside Audit & Supervisory Board Members. 3. Director Akio Dobashi stepped down as outside director of OSJB Holdings Corporate on June 28, The Company has notified Directors Mr. Norihisa Doi and Mr. Akio Dobashi as independent directors and Audit & Supervisory Board Members Mr. Shigeo Hasegawa and Mr. Nobuyasu Kusumi as independent Audit & Supervisory Board Members to Tokyo Stock Exchange, Inc. on which the Company is listed as provided under the regulations of Tokyo Stock Exchange, Inc. 5. Mr. Masahiro Shimizu and Mr. Fumio Ogaki all of whom are Audit & Supervisory Board Members have accounting experience in the Company for many years and have a wealth of expertise in finance and accounting. 6. Mr. Shigeo Hasegawa is Audit & Supervisory Board Member and qualified as a Certified Public Accountant and has a wealth of expertise in finance and accounting. 7. Mr. Kunihiko Tedo is Audit & Supervisory Board Members and has accounting experience in Canon Inc., our parent company, for many years and has a wealth of expertise in finance and accounting. 8. The Company has entered into contracts, in accordance with the Articles of Incorporation, with the Outside Director and the Audit & Supervisory Board Members to limit their liabilities to compensate damages under Paragraph 1, Article 423 of the Companies Act of Japan, to the limit of amount set forth in the Paragraph 1, Article 425 of the Companies Act of Japan. 27 Canon Marketing Japan Inc.

29 Reference Documents For General Meeting of Shareholders Reference Business Report Consolidated Financial Statements Financial Statements Notice of Convocation (2) Remuneration to Directors and Audit & Supervisory Board Members Directors 10 persons 576 million Audit & Supervisory Board Members 5 persons 114 million Notes: 1. The total amount of remuneration paid to 2 Outside Directors and 3 Outside Audit & Supervisory Board Members is 90 million. 2. Directors remuneration include provision for directors bonuses for this fiscal year in the amount of 78 million. (3) Status of Outside Director and Outside Audit & Supervisory Board Members Relation Between Important Organization of Concurrent Post and the Company Name Concurrent Post Organization of Concurrent Post Relation with The Company Akio Dobashi (Outside Director) Outside Director Maeda Corporation No special relation Note: Director Akio Dobashi stepped down as outside director of OSJB Holdings Corporate on June 28, 2017, and has no special relationship with the company. Principal Activities Name Norihisa Doi (Outside Director) Principal Activities Attended all of 17 Board of Directors meetings held during this fiscal year, and provided input based on his insight in information security when necessary. Akio Dobashi (Outside Director) Shigeo Hasegawa (Outside Audit & Supervisory Board Member) Kunihiko Tedo (Outside Audit & Supervisory Board Member) Nobuyasu Kusumi (Outside Audit & Supervisory Board Member) Attended all 17 Board of Directors meetings held during this fiscal year, and provided input based on his experience and knowledge in the field of corporate management. Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held during this fiscal year, and provided input based on his insight as a Certified Public Accountant when necessary. Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held during this fiscal year, and provided input based on his experience and knowledge in the field of accounting. Audit Reports Attended all of 17 Board of Directors meetings and all of 18 Audit & Supervisory Board meetings held during this fiscal year, and provided input based on his experience and knowledge in the field of corporate management. Canon Marketing Japan Inc. 28

30 BUSINESS REPORT 4. Status of Accounting Auditor (1) Name of Accounting Auditor Ernst & Young ShinNihon LLC (2) Remuneration and Other Amounts to Accounting Auditor for This Fiscal Year (i) Remuneration and other amounts payable by the Company for the services defined in Paragraph 1, Article 2 of the Certified Public Accountants Act (ii) Total amount of cash and other financial benefits payable by the Group to the Accounting Auditor Amount 99 million 181 million Notes: 1. In the audit agreement between the Company and the Accounting Auditor, remuneration amounts are determined on a lump-sum without breakdown into a separate remuneration amount for auditing in accordance with the Companies Act and in accordance with the Financial Instruments and Exchange Act. Accordingly, the amounts shown in (i) above represent total amounts of remuneration and other amounts for both of these auditing services. 2. The Company pays consideration to accounting auditors for work concerning agreed upon procedures other than the work specified in Article 2, Paragraph 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 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. (4) Accounting Auditor Subject to Business Suspension Disposition during Past Two Years (i) Subject of disposition Ernst & Young ShinNihon LLC (ii) Contents of disposition Suspension of accepting new engagements: three months (From January 1, 2016 to March 31, 2016) Business improvement order (improvement of the operation control structure) (iii) Reason for disposition In regard to the audit of financial statements for TOSHIBA CORPORATION in the fiscal year ended March 31, 2010, the fiscal year ended March 31, 2012, and the fiscal year ended March 31, 2013, the above mentioned auditing firm s certified public accountants, in negligence of due care, attested financial statements containing material false matters as those containing no material false matters. The above mentioned auditing firm s operation of the services was found to be grossly inappropriate. 29 Canon Marketing Japan Inc.

31 5. Policy Regarding Decision of Dividends from Surplus, etc. The Company made its basis policy, with respect to profit distribution, in the Three-Year Management Plan 2015 to 2017 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 a year-end dividends of 35 yen per share, totaling 60 yen per share (consolidated payout ratio of 37.6%) as a full-year dividends together with the interim dividends (25 yen per share). Note: The amount and the number of shares described in this report are rounded down to the nearest number of the units indicated. Profit attributable to owners of parent per share are rounded off to two decimal places. Reference Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Audit Reports Financial Statements Consolidated Financial Statements Canon Marketing Japan Inc. 30

32 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets Assets As of Dec. 31, 2017 As of Dec. 31, 2016 Current assets 397, ,141 Cash and deposits 66,479 76,785 Notes and accounts receivable 125, ,475 Securities 70,500 30,500 Merchandise and finished goods 32,076 28,270 Work in process Raw materials and supplies Deferred tax assets 4,062 4,214 Short-term loans receivable 90,014 90,044 Other 7,050 6,263 Allowance for doubtful receivables (98) (121) Non-current assets 113, ,585 Property, plant and equipment 75,090 96,701 Buildings and structures, net 30,825 47,425 Machinery, equipment and vehicles, net Furniture and fixtures, net 3,732 3,963 Rental assets, net 11,058 10,574 Land 29,016 34,364 Lease assets, net Construction in progress 89 - Intangible assets 5,485 6,819 Software 5,153 6,443 Lease assets Right of using facilities Other 2 4 Investments and other assets 32,750 32,064 Investments in securities 9,027 7,422 Long-term loans receivable Net defined benefit asset Deferred tax assets 16,203 17,668 Lease deposits 4,880 4,824 Other 2,532 2,483 Allowance for doubtful receivables (327) (344) Total assets 510, ,727 Liabilities (Millions of yen, amounts less than one million yen are rounded down) As of Dec. 31, 2017 As of Dec. 31, 2016 Current liabilities 157, ,966 Notes and accounts payable 100, ,662 Short-term loans payable Lease obligations Accrued expenses 18,168 18,968 Accrued income taxes 6,289 4,689 Consumption taxes payable 4,586 4,296 Provision for bonuses 3,443 3,473 Provision for directors' bonuses Provision for product warranties Provision for loss on order received Other 22,949 22,086 Non-current liabilities 55,911 59,841 Lease obligations Deferred tax liabilities Deferred tax liabilities for land revaluation - 6 Allowance for long-term continuous service rewards Net defined benefit liabilities 49,604 53,568 Other 4,743 4,675 Net assets Total liabilities 213, ,808 Shareholders' equity 301, ,571 Capital stock 73,303 73,303 Capital surplus 82,820 82,820 Retained earnings 176, ,363 Treasury stock (31,921) (31,914) Accumulated other comprehensive Income (4,081) (7,099) Valuation difference on available-for-sale securities 3,159 2,328 Deferred gains or losses hedges 6 (14) Foreign currency translation adjustments Remeasurements of defined benefit plants (7,345) (9,560) Non-controlling interests Total net assets 297, ,919 Total liabilities and net assets 510, , Canon Marketing Japan Inc.

33 Consolidated Statements of Income From January 1, 2017 to December 31, 2017 (Millions of yen, amounts less than one million yen are rounded down) From January 1, 2016 to December 31, 2016 Net sales 632, ,313 Cost of sales 408, ,306 Gross profit 223, ,007 Selling, general and administrative expenses 193, ,331 Operating income 30,406 27,676 Non-operating income 1,328 1,405 Interest income Dividend income Insurance income Other Non-operating expenses Interest expenses Foreign exchange losses Other Ordinary income 31,491 28,717 Extraordinary income 1,482 1,473 Gain on sales of noncurrent assets Gain on sales of investments in securities Other Extraordinary losses 2,054 1,287 Loss on sales and disposal of noncurrent assets Impairment loss 1, Loss on disaster - 27 Special extra retirement payments Other Profit before income taxes 30,918 28,903 Income taxes-current 9,950 8,789 Income taxes-deferred 272 1,918 Profit 20,695 18,195 Profit attributable to non-controlling interests Profit attributable to owners of parent 20,679 18,161 Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 32

34 NON-CONSOLIDATED FINANCIAL STATEMENTS Non-Consolidated Balance Sheets As of Dec. 31, 2017 As of Dec. 31, 2016 Assets Current assets 358, ,556 Cash and deposits 50,644 58,069 Notes receivable 2,684 2,877 Electronically recorded monetary claims - operating 9,470 8,341 Accounts receivable 97,701 96,017 Securities 70,500 30,500 Merchandise and finished goods 27,057 22,834 Work in process Raw materials and supplies Advance payment - trade 1,615 1,526 Prepaid expenses Deferred tax assets 2,734 2,871 Short-term loans receivable 90,643 90,550 Accounts receivable - other 3,904 4,195 Forward exchange contracts 8 3 Other Allowance for doubtful receivables (216) (111) Noncurrent assets 145, ,726 Property, plant and equipment 48,554 67,183 Buildings 12,593 28,096 Structures Machinery Furniture and fixtures 2,551 2,735 Rental assets 11,038 10,543 Land 21,675 24,829 Lease assets Intangible assets 4,265 5,211 Software 4,147 5,085 Lease assets 7 15 Right of using facilities Investments and other assets 92,198 92,331 Investments in securities 7,414 6,646 Shares of subsidiaries and associates 71,010 71,010 Claims provable in bankruptcy, claims provable in rehabilitation and other Long-term prepaid expenses Deferred tax assets 9,718 10,226 Lease deposits 2,198 2,696 Other 1,279 1,389 Allowance for doubtful receivables (224) (238) Total assets 503, ,283 Liabilities (Millions of yen, amounts less than one million yen are rounded down) As of Dec. 31, 2017 As of Dec. 31, 2016 Current liabilities 186, ,829 Electronically recorded obligations - operating 1,859 2,163 Accounts payable 96,874 97,598 Short-term loans payable 47,000 38,660 Lease obligations Accounts payable - other 2,766 2,392 Accrued expenses 14,890 16,362 Accrued Income taxes 5,037 3,490 Consumption taxes payable 2,530 2,008 Advances received 9,977 9,537 Deposits received 3,518 3,333 Provision for bonuses 1,672 1,672 Provision for directors' bonuses Provision for product warranties Non-current liabilities 33,182 34,036 Lease obligations Provision for retirement benefits 27,957 28,987 Allowance for long-term continuous service rewards Other 4,625 4,406 Total liabilities 219, ,866 Net assets Shareholders' equity 281, ,413 Capital stock 73,303 73,303 Capital surplus 85,204 85,204 Legal capital surplus 85,198 85,198 Other capital surplus 5 5 Retained earnings 154, ,824 Legal retained earnings 2,853 2,853 Other retained earnings 151, ,970 Reserve for advanced depreciation of non-current assets - 6 General reserve 81,700 81,700 Retained earnings brought forward 70,280 59,264 Treasury stock (31,924) (31,918) Valuation and translation adjustments 2,470 2,003 Valuation difference on available-for-sale securities 2,464 2,018 Deferred gains or losses hedges 6 (14) Total net assets 283, ,417 Total liabilities and net assets 503, , Canon Marketing Japan Inc.

35 Non-Consolidated Statements of Income From January 1, 2017 to December 31, 2017 (Millions of yen, amounts less than one million yen are rounded down) From January 1, 2016 to December 31, 2016 Net sales 489, ,457 Cost of sales 349, ,212 Gross profit 139, ,245 Selling, general and administrative expenses 119, ,062 Operating income 19,768 16,183 Non-operating income 5,508 4,507 Interest income Dividend income 4,618 3,511 Insurance income Rent income of subsidiaries and affiliates 0 3 Other Non-operating expenses Interest expenses Share related expenses Foreign exchange losses Other Ordinary income 24,881 20,375 Extraordinary income Gain on sales of noncurrent assets 8 2 Gain on sales of investments in securities Extraordinary losses 713 1,089 Loss on sales and disposal of noncurrent assets Loss on valuation of shares of subsidiaries and associates Other Income before income taxes 24,670 19,925 Income taxes-current 6,094 4,493 Income taxes-deferred 435 1,838 Profit 18,141 13,593 Notice of Convocation Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 34

36 AUDIT REPORTS Accounting Audit Report of Accounting Auditor on Consolidated Financial Statements (TRANSLATION) The Board of Directors Canon Marketing Japan Inc. Report of Independent Auditors February 8, 2018 Ernst & Young ShinNihon LLC Sayaka Shimura Certified Public Accountant Designated and Engagement Partner Kiyoto Tanaka Certified Public Accountant Designated and Engagement Partner Keiichi Wakimoto Certified Public Accountant Designated and Engagement Partner Pursuant to Paragraph 4, Article 444 of the Companies Act, we have audited the accompanying consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement of income, the consolidated statement of changes in net assets and the notes to the consolidated financial statements of Canon Marketing Japan Inc. (the Company ) applicable to the fiscal year from January 1, through December 31, Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion from an independent perspective on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. The purpose of an audit of the consolidated financial statements is not to express an opinion on the effectiveness of the entity s internal control, but in making these risk assessments the auditor considers internal controls relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used, the method of their application, and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and results of operations of the Canon Marketing Japan Group, which consisted of the Company and consolidated subsidiaries, applicable to the fiscal year ended December 31, 2017 in conformity with the accounting principles generally accepted in Japan. Conflicts of Interest We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act. 35 Canon Marketing Japan Inc.

37 Accounting Audit Report of Accounting Auditor Notice of Convocation (TRANSLATION) The Board of Directors Canon Marketing Japan Inc. Report of Independent Auditors February 8, 2018 Ernst & Young ShinNihon LLC Sayaka Shimura Certified Public Accountant Designated and Engagement Partner Kiyoto Tanaka Certified Public Accountant Designated and Engagement Partner Keiichi Wakimoto Certified Public Accountant Designated and Engagement Partner Pursuant to Item 1, Paragraph 2, Article 436 of the Companies Act, we have audited the accompanying non-consolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated statement of income, the non-consolidated statement of changes in net assets, the notes to the non-consolidated financial statements, and the related supplementary schedules of Canon Marketing Japan Inc. (the Company ) applicable to the 50th fiscal year from January 1, 2017 through December 31, Management s Responsibility for the Financial Statements and the Related Supplementary Schedules Management is responsible for the preparation and fair presentation of these non-consolidated financial statements and the related supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation and fair presentation of the financial statements and the related supplementary schedules that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion from an independent perspective on these non-consolidated financial statements and the related supplementary schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the related supplementary schedules are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the related supplementary schedules. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements and the related supplementary schedules, whether due to fraud or error. The purpose of an audit of the non-consolidated financial statements is not to express an opinion on the effectiveness of the entity s internal control, but in making these risk assessments the auditor considers internal controls relevant to the entity s preparation and fair presentation of the non-consolidated financial statements and the related supplementary schedules in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used, the method of their application, and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the related supplementary schedules. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the non-consolidated financial statements and the related supplementary schedules referred to above present fairly, in all material respects, the financial position and results of operations of Canon Marketing Japan Inc. applicable to the 50th fiscal year ended December 31, 2017 in conformity with accounting principles generally accepted in Japan. Conflicts of Interest We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act. Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 36

38 AUDIT REPORTS Audit & Supervisory Board s Report February 8, 2018 Audit Report We, Audit & Supervisory Board has discussed and prepared this Audit Report based on the audit reports prepared by each of the Audit & Supervisory Board Members pertaining to the conduct of duties by the Directors of Canon Marketing Japan Inc. during the 50th fiscal year from January l, 2017 to December 31, 2017, and reports as follows. 1. Methods and Substance of Audit by Audit & Supervisory Board Members and Audit & Supervisory Board (1) We decided on the auditing policies and the allocation of work duties, etc., received a report on the auditing work performed and the results from each Audit & Supervisory Board Member, and received a report on the status of the work executed from the Directors and the Independent Auditor and requested their explanations as necessary. (2) While confirming to the auditing standards as decided by us, the auditing policies and the allocation of duties, etc., each Audit & Supervisory Board Member endeavored 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. i) We attended the meetings of the Board of Directors and other important meetings, received reports on the status of the work executed from the Directors and the employees and requested their explanations as necessary, inspected material internal decision-making documents, etc., and investigated the status of the operations and assets of 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. ii) The following systems (Internal Control System) were determined by a Board of Directors resolution and designed based on this resolution. We periodically received reports from the Directors, employees and others, requested explanations as necessary regarding the design and implementation of the Internal Control Systems, and expressed opinions on the substance of the decisions made by the Board of Directors with regard to the Internal Control Systems. (a) A system for ensuring that the performance of duties by the Directors complies with the applicable laws and regulations and Articles of Incorporation. (b) A system for ensuring the Directors performance of the adequate operations of Canon Marketing Japan Group, which consists of the Company and its subsidiaries as stipulated under Article 100, paragraphs l and 3 of the Ordinance for Enforcement of the Companies Act. iii) We examined the contents of the matters considered and the assessment and reasons detailed in this Business Report for the transactions with the Parent Company under Article 118 of the Ordinance for Enforcement of the Companies Act, taking into account the status of the deliberations of the Board of Directors, etc. iv) We monitored and verified whether the independence of the Accounting Auditor was maintained and whether an appropriate audit was being undertaken, received reports from the Accounting Auditor on the status of operations, and requested explanations as necessary. We also received reports from the Accounting Auditor stating that 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 statement of changes in 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 changes in equity and the notes to the consolidated financial statements). 2. Results of Audit (1) Results of examination of the Business Report, etc. a) In our opinion, the business report and its supplementary schedules conformity with the applicable laws and regulations of Japan and the Articles of Incorporation of the Company and fairly present the state of the Company s affairs; b) We have found no misconduct or material fact constituting a violation of any applicable laws and regulations of Japan or the Articles of Incorporations in connection with the Directors performance of their duties; and c) In our opinion, the substance of the decisions made by the Board of Directors with regard to the Internal Control Systems is appropriate. Furthermore, we found no matters that require noting with regard to the description in the Business Report and the Directors performance of their duties in connection with the relevant internal control systems; and d) With respect to the transactions with the Parent Company, etc. that are described in this Business Report, we have found no matters that require noting with regard to the matters considered by Board of Directors and the Board of Directors assessment and factors that might be adverse to the Company s interests. (2) Results of examination of the financial statements and their supplementary schedules In our opinion, the auditing methods used and the conclusions reached by the Accounting Auditor, Ernst Young ShinNihon LLC, are appropriate. (3) Results of examination of the consolidated financial statements In our opinion, the auditing methods used and the conclusions reached by the Independent Auditor, Ernst Young ShinNihon LLC, are appropriate. Audit & Supervisory Board, Canon Marketing Japan Inc. Audit & Supervisory Board Member (full time) Masahiro Shimizu Audit & Supervisory Board Member (full time) Fumio Ogaki Audit & Supervisory Board Member (full time) Shigeo Hasegawa (Outside Audit & Supervisory Board Member) Audit & Supervisory Board Member (full time) Kunihiko Tedo (Outside Audit & Supervisory Board Member) Audit & Supervisory Board Member (full time) Nobuyasu Kusumi (Outside Audit & Supervisory Board Member) 37 Canon Marketing Japan Inc.

39 Reference List of Canon MJ Group Companies (As of January 1, 2018) Notice of Convocation Company Name Canon Marketing Japan Inc. Canon IT Solutions Inc. SuperStream Inc. Qualysite Technologies Inc. Canon Software America, Inc. Canon Information Systems (Shanghai) Inc. Canon IT Solutions (Thailand) Co., Ltd. Material Automation (Thailand) Co., Ltd. Canon BizAttenda Inc. Edifist Learning Inc. Canon System & Support Inc. A&A Co., Ltd. Canon Production Printing Systems Inc. Commercial Printing Lab Inc. SI and consulting, IT service and development and sale of various softwares Planning, development, and sales of SuperStream NX management infrastructure solution for accounting and salaries Development of system specialized in Java and operation, maintenance and ancillary services of datacenters Development and operation of various business application softwares for the Group Companies SI and consulting for the Group companies and other Japanese companies and development and sales of software products for Canon products Supervision of Group Companies in Thailand and Vietnam Lines of Business Proposition, sales and services of IT hardware and software Consulting, support for business process optimization, back office business process optimization, office support, contact center, temp staffing, and services Consulting of human resource development, various trainings and ancillary services Consulting, sales, support and maintenance services for Canon products and the IT solutions of other companies Domestic sales including Japanese localization of "Vectorworks" 3D CAD software, and planning, development and sales of related softwares Sales of production printing equipment and consumables, maintenance service, development and provision of workflow systems, etc. and printing service, etc. Creation of digital printing business, content production, and printing business (inkjet continuous feed printers, production printers, and offset printing machinery) Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Financial Statements Canon Lifecare Solutions Inc. Sales of medical equipment, healthcare related equipment and consumables and medical image systems Elquest Corporation Canon ITS Medical Inc. Design, manufacturing and sales of dispensing equipment, infection prevention equipment, medical equipment and health care equipment Provision of IT solution, development of systems and construction of network and hardware in medical health care field Audit Reports AZE, Ltd. Development, manufacture and sales of 3D medical image analysis systems, etc. Canon Customer Support Inc. Canon Business Support Inc. Operation of customer support centers primarily dealing with Canon products, technical support services, acceptance individual consumer products for repair and maintenance, photo business services Facility management, real estate service and office service of the Group companies Notes: 1. There are 23 consolidated subsidiaries (including 4 companies such as domain name management companies.) 2. Sales figures for major subsidiaries (2017) were as follows: Canon System & Support Inc billion, Canon Production Printing Systems Inc billion, Canon IT Solutions Inc billion, Canon Lifecare Solutions Inc billion Reference Canon Marketing Japan Inc. 38

40 On February 1, 2018, the Canon Marketing Japan Group celebrated the 50th anniversary of its founding In February 1968, Canon s domestic sales division was spun off to establish Canon Business Machines Sales Inc. and Canon Business Machine Services Inc. A year later in 1969, Canon Camera Sales Co., Inc. was founded. Then, in 1971, the three companies merged to form Canon Sales Co., Inc., the predecessor to Canon Marketing Japan. In 2006, the corporate name was changed to the current Canon Marketing Japan Inc. In 2018, the company will observe the 50th anniversary of its founding. Highlights Canon Business Machines Sales Inc. Canon s Domestic Sales Division Spunoff Canon Business Machine Services Inc Canon Sales Co., Inc. is Established Listed in the First Section of the Tokyo Stock Exchange Name Changed to Canon Marketing Japan Inc. 50th Anniversary Canon Camera Sales Inc. 39 Canon Marketing Japan Inc.

41 Reference Documents For General Meeting of Shareholders Business Report Consolidated Financial Statements Notice of Convocation Establishment to to to to to 2018 Production and sales units were split off from one another in order to conduct business in closer proximity to customers. A manufacturer s sales company structure for cameras and business machines is established. Seeking to expand operations, sales channels are strengthened. The company launches and expands independent businesses for non- Canon products, including the import and sale of PCs and software. In response to rapidly advancing digitization and networking, a system integration business is launched to combine hardware and software from other companies in addition to Canon products. Over the past five decades, the environment surrounding customers has changed at a bewildering pace, but we have continued to embrace our focus on marketing, making every effort to not only sell Canon products, but to always deliver proposals developed from a customer perspective. Looking ahead, we will leverage our strengths in Canon products and the IT capabilities of Canon Marketing Japan to become a true partner to our customers by providing them with solutions that solve the issues they confront. An aggressive reorganization is implemented to achieve overall Group optimization, and consolidated management is established. Aggressive M&A activities are implemented to reinforce the foundations of the IT solutions business. Embracing the key phrase Beyond Canon, Beyond Japan to represent business diversification, Canon expands its independent businesses including IT solutions. A new organizational structure is adopted to strengthen customer contact points and expand the business. Special 50th Anniversary Website On February 1, the Special 50th Anniversary website opened under the Corporate Information section of Canon Marketing Japan. The website includes information on the company s history and other topics, and can be viewed at the following address: canon.jp/cmj-50th Financial Statements Audit Reports Reference Canon Marketing Japan Inc. 40

42 Details of our Communication Activities Website On our Investor Relations website, we provide a range of information for shareholders and investors, including notices and reports on company presentations and other events. Our Investor Relations website was selected as a Grade AAA website in the 2017 All Japanese Listed Companies Website Ranking compiled by Nikko Investor Relations Co., Ltd. We are committed to maintaining a straight-forward IR site and enhancing content even further in the future, so as to give investors an even better understanding of Canon MJ. Presentations and IR Events In August, we exhibited at the 12 th Nikkei IR Investment Fair 2017, an event aimed at individual investors. We also held company presentations for individual investors throughout the year at the branches of securities firms. We hope to create a lot more opportunities like this in the future, and will post details of scheduled events on the website as soon as they are available. General Stock Information Fiscal Year Ordinary General Meeting of Shareholders Record date for above Record date for dividends Manager of the register of shareholders Business handling place Account management institution for the special account (tokubetsu koza) Number of shares constituting one unit Method of public notice Stock exchange listings Securities code 8060 From January 1 to December 31 of each year March of each year December 31 of each year End-of-year dividend: December 31 of each year Interim dividend: June 30 of each year 2-1, Yaesu 1-chome, Chuo-ku, Tokyo Mizuho Trust & Banking Co., Ltd. Stock Transfer Agency Department, Head Office Mizuho Trust & Banking Co., Ltd. Mizuho Trust & Banking Co., Ltd. / Mitsubishi UFJ Trust and Banking Corporation 100 shares Electronic means ( index.html) However, if the Company is unable to give an electronic public notice due to an accident or any other unavoidable reason, the notice shall be given in the Nikkei. Tokyo Stock Exchange (First Section) Inquiries regarding share-related procedures If your shares are managed by a securities firm, please contact the relevant securities firm with any inquiries. * However if your inquiry concerns payment of unpaid dividends or provision of a payment statement, please contact the Manager of the register of shareholders (Mizuho Trust & Banking Co., Ltd.: (toll-free)). If your shares are not managed by a securities firm, please contact the following division with any inquiries Stock Transfer Agency Department of Mizuho Trust & Banking Co., Ltd (toll-free) 41 Canon Marketing Japan Inc.