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What changed in Sony Group Corp's 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sony Group Corp's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+633 added−595 removedSource: 20-F (2024-06-25) vs 20-F (2023-06-20)

Top changes in Sony Group Corp's 2024 20-F

633 paragraphs added · 595 removed · 437 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

56 edited+13 added−15 removed122 unchanged
Biggest changeAlthough global demand for semiconductors and other components was on a declining trend as of the end of the fiscal year ended March 31, 2023, Sony’s operating results and financial condition could be affected if demand becomes strong again. Reliance on third-party software and technologies may make it increasingly difficult for Sony to differentiate its products from competitors’ products.
Biggest changeRegarding the global shortage of semiconductors, which became pronounced from the latter half of the fiscal year ended March 31, 2021 through the first half of the fiscal year ended March 31, 2023, although global supply for semiconductors was stable as of the end of the fiscal year ended March 31, 2024, Sony’s operating results and financial condition could be affected if supply becomes restricted again.
Based upon past experience and industry practice, Sony believes it will be able to obtain or renew licenses relating to various intellectual property rights that its business needs in the future; however, such licenses may not be available at all or on acceptable terms, and as a consequence Sony may need to redesign or discontinue its marketing, selling or distribution of such products or services.
Based upon past experience and industry practice, Sony believes it will be able to obtain or renew licenses relating to various intellectual property rights that its business needs in the future; however, such licenses may not be available at all or on acceptable terms, and as a consequence Sony may need to redesign or discontinue its marketing, selling or distribution of such products and services.
While Sony performs a comprehensive analysis and evaluation of merged or acquired organizations prior to their acquisition from various perspectives such as technology, accounting, tax, finance, human resources (“HR”) and legal, Sony’s financial results may be adversely affected by factors including the significant cost of the acquisition and/or integration expenses, IT and information security risks introduced from newly acquired organizations, failure to achieve initially expected synergies, failure to generate expected revenue and cost improvements, loss of key personnel and assumption of liabilities.
While Sony performs a comprehensive analysis and evaluation of merged or acquired organizations prior to their merger or acquisition from various perspectives such as technology, accounting, tax, finance, human resources (“HR”), and legal, Sony’s financial results may be adversely affected by factors including the significant cost of the acquisition and/or integration expenses, IT and information security risks introduced from newly merged or acquired organizations, failure to achieve initially expected synergies, failure to generate expected revenue and cost improvements, loss of key personnel and assumption of liabilities.
However, this strategy depends on its ability to further develop network services technologies, coordinate and prioritize strategic and operational issues among Sony’s various business units and sales channels, continually introduce enhanced, energy efficient and competitively priced hardware that is seamlessly connected to energy efficient network platforms with user interfaces that are innovative and attractive to consumers and also standardize technological and interface specifications industry-wide and across Sony’s networked products and business units.
However, this strategy depends on its ability to further develop AI and network services technologies, coordinate and prioritize strategic and operational issues among Sony’s various business units and sales channels, continually introduce enhanced, energy efficient and competitively priced hardware that is seamlessly connected to energy efficient network platforms with user interfaces that are innovative and attractive to consumers and also standardize technological and interface specifications industry-wide and across Sony’s networked products and business units.
A major earthquake in Japan, especially in Tokyo, the Tokai area or the Kyushu and Tohoku areas, where Sony headquarters, certain consumer electronics product manufacturing sites and image sensor manufacturing sites, respectively, are located, could cause substantial damage to Sony’s business operations, including damage to buildings, machinery, equipment and inventories, and the interruption of production at manufacturing facilities.
A major earthquake in Japan, especially in Tokyo, the Tokai area or the Kyushu and Tohoku areas, where Sony headquarters, certain electronics product manufacturing sites and image sensor manufacturing sites, respectively, are located, could cause substantial damage to Sony’s business operations, including damage to buildings, machinery, equipment and inventories, and the interruption of production at manufacturing facilities.
The failure to prevent unauthorized use or theft of Sony’s intellectual property rights, the failure to enter into licenses for necessary third-party intellectual property rights, the invalidation of Sony’s intellectual property rights or the settlement of an infringement claim against Sony by others may adversely impact Sony’s reputation, operating results and financial condition.
The failure to prevent unauthorized use or theft of Sony’s intellectual property rights by third parties, the failure to enter into licenses for necessary third-party intellectual property rights, the invalidation of Sony’s intellectual property rights or the settlement of an infringement claim against Sony by others may adversely impact Sony’s reputation, operating results and financial condition.
Competition on price can lead to lower margins when costs do not fall at a proportional rate, and competition for talent and appealing product can also lead to lower profitability if the higher costs required for such talent and content cannot be recouped through greater sales.
Competition on price can lead to lower margins when costs do not fall at a proportional rate, and competition for talent and appealing content can also lead to lower profitability if the higher costs required for such talent and content cannot be recouped through greater sales.
Sony must continually introduce, enhance and stimulate customer demand for consumer electronic products and network services. Sales of these products and services are particularly sensitive to the significant weighting of consumer demand to the year-end holiday season.
Sony must continually introduce, enhance and stimulate customer demand for electronic products and services. Sales of these products and services are particularly sensitive to the significant weighting of consumer demand to the year-end holiday season.
As cyber-attacks become increasingly sophisticated and automated, and as tools and resources become more readily available, there can be no guarantee that Sony’s actions, security measures and controls designed to prevent, detect or respond to outside intrusion, limit access to data, prevent loss, destruction, alteration, or exfiltration of business information, or limit the negative impact from such attacks can provide absolute security.
Cybersecurity .” As cyber-attacks become increasingly sophisticated and automated, and as tools and resources become more readily available, there can be no guarantee that Sony’s actions, security measures and controls designed to prevent, detect or respond to outside intrusion, limit access to data, prevent loss, destruction, alteration, or exfiltration of business information, or limit the negative impact from such attacks can provide absolute security.
Sony’s products and services rely on a large volume of third-party suppliers and business partners for parts, components, materials, software and network services, including semiconductors, chipsets for PlayStation ® game consoles and mobile products, LCD (liquid crystal display) panels and the Android OS that is used in mobile products, televisions and services.
Sony’s products and services rely on a large volume of third-party suppliers and business partners for parts, components, materials, software and network services, including semiconductors, chipsets for PlayStation ® game consoles and mobile products, liquid crystal display (“LCD”) panels and the Android OS that is used in mobile products, televisions and services.
As of March 31, 2023, Sony and/or its subsidiaries had unrecognized deferred tax assets, principally in Japan for local taxes. Additionally, deferred tax assets could expire unused or otherwise not be realizable for a variety of reasons including the lack of sufficient taxable income in the appropriate jurisdiction.
As of March 31, 2024, Sony and/or its subsidiaries had unrecognized deferred tax assets, principally in Japan for local taxes. Additionally, deferred tax assets could expire unused or otherwise not be realizable for a variety of reasons including the lack of sufficient taxable income in the appropriate jurisdiction.
Additionally, Sony’s intellectual property rights may be challenged or invalidated, or such intellectual property rights may not be sufficient to provide Sony with competitive advantages. Many of Sony’s products and services are designed under the license of patents and other intellectual property rights owned by third parties.
Additionally, Sony’s intellectual property rights may be challenged or invalidated, or such intellectual property rights may not be sufficient to provide Sony with competitive advantages. Many of Sony’s products and services are designed, developed or manufactured under the license of patents and other intellectual property rights owned by third parties.
If this situation worsens further in the future, it could create global uncertainty, possibly leading to the worsening of Sony’s businesses in other regions or a deterioration in global economic conditions resulting in an adverse impact on Sony’s operating results and financial condition. Foreign exchange rate fluctuations can affect Sony’s operating results and financial condition.
If this situation worsens further in the future, it could create global uncertainty, possibly leading to the worsening of Sony’s businesses in other regions or a deterioration in global economic conditions resulting in an adverse impact on Sony’s operating results and financial condition. - 10 - Table of Contents Foreign exchange rate fluctuations can affect Sony’s operating results and financial condition.
An increase in - 12 - Table of Contents non-performing loans or a decline in prices of the real estate collateral from the market changes discussed above or deterioration of credit quality may have an adverse effect on the operating results and financial condition through an increase in the allowance for credit losses.
An increase in non-performing loans or a decline in prices of the real estate collateral from the market changes discussed above or deterioration of credit quality may have an adverse effect on the operating results and financial condition through an increase in the allowance for credit losses.
For - 14 - Table of Contents example, customer information and Sony or third-party technical information may be misappropriated, the functionality of Sony’s products and services may be impaired, or Sony products may be used in denial-of-service attacks. There can be no guarantee that Sony’s security measures will prevent products from being compromised.
For example, customer information and Sony or third-party technical information may be misappropriated, the functionality of Sony’s products and services may be impaired, or Sony products may be used in denial-of-service attacks. There can be no guarantee that Sony’s security measures will prevent products from being compromised.
Additionally, depending on the status of lockdowns or other anti-infection measures, as well as future increases in infections, Sony may be impacted by delays in the production schedules of new motion pictures and television programming, as well as decreased advertising revenue.
Additionally, depending on the status of lockdowns or other anti-infection measures, as well as future increases in infections, Sony may be impacted by delays in the production schedules - 13 - Table of Contents of new motion pictures and television programming, as well as decreased advertising revenue.
If Sony is unable to maintain its advantageous market position in the fields in which it has a technological or other competitive advantage, Sony is unable to effectively anticipate and counter the ongoing price erosion that - 6 - Table of Contents frequently affects its consumer products or the cost pressures affecting its businesses, there is a change in existing business models or consumer preferences, or the average prices of Sony’s products decrease faster than Sony is able to reduce manufacturing costs, Sony’s operating results and financial condition may be adversely impacted.
This situation could adversely affect the operating results of the Pictures segment. - 6 - Table of Contents If Sony is unable to maintain its advantageous market position in the fields in which it has a technological or other competitive advantage, Sony is unable to effectively anticipate and counter the ongoing price erosion that frequently affects its consumer products or the cost pressures affecting its businesses, there is a change in existing business models or consumer preferences, or the average prices of Sony’s products decrease faster than Sony is able to reduce manufacturing costs, Sony’s operating results and financial condition may be adversely impacted.
If such prior notification is filed, the proposed acquisition may not be consummated until the prescribed screening period expires. In some cases, the Ministers may extend the screening period, and may recommend or - 16 - Table of Contents order any modification or the abandonment of such acquisition.
If such prior notification is filed, the proposed acquisition may not be consummated until the prescribed screening period expires. In some cases, the Ministers may extend the screening period, and may recommend or order any modification or the abandonment of such acquisition.
Those laws and regulations, as well as consumer and regulator focus, might change in significant ways, leading to an increase in the costs of Sony’s operations, a curtailment of Sony’s activities, and/or an adverse effect on Sony’s reputation.
Those laws and regulations, as well as external stakeholder and regulator focus, might change in significant ways, leading to an increase in the costs of Sony’s operations, a curtailment of Sony’s activities, and/or an adverse effect on Sony’s reputation.
Furthermore, in Japan, with a declining workforce due to the falling birthrate and aging population, intensifying competition among companies for specialized talent, and rising labor costs, it may become difficult to secure the necessary talent if Sony’s HR system is inadequate in its design and operations.
Furthermore, in Japan, - 11 - Table of Contents with a declining workforce due to the falling birthrate and aging population, intensifying competition among companies for specialized talent, and rising labor costs, it may become difficult to secure the necessary talent if Sony’s HR system is inadequate in its design and operations.
In the I&SS segment, Sony suspended product shipments of image sensors to a certain Chinese customer from September 15, 2020, pursuant to export restrictions announced by the U.S. government on August 17, 2020.
In the I&SS segment, Sony suspended product shipments of image sensors to a certain Chinese customer from September 2020, pursuant to export restrictions announced by the U.S. government in August 2020.
The operating results and financial condition of many wholesalers, retailers, other resellers and third-party distributors have been adversely impacted by competition, especially from online retailers, and weak economic - 8 - Table of Contents conditions.
The operating results and financial condition of many wholesalers, retailers, other resellers and third-party distributors have been adversely impacted by competition, especially from online retailers, and weak economic conditions.
Additionally, global financial markets may experience significant levels of volatility and disruption, generally putting downward pressure on financial and other asset prices and impacting credit availability. Historically, Sony’s primary sources of funds have been cash flows from operations, the issuance of CP and other debt securities, such as term debt, as well as borrowings from banks and other institutional lenders.
Additionally, global financial markets may experience significant levels of volatility and disruption, generally putting downward pressure on financial and other asset prices and impacting credit availability. Historically, Sony’s primary sources of funds have been cash flows from operations, the issuance of CP and mid- to long-term debt, as well as borrowings from banks and other institutional lenders.
A substantial legal liability or adverse regulatory outcome and the substantial cost to defend the litigation or regulatory actions may have an adverse effect on Sony’s reputation, operating results and financial condition. Sony is subject to financial and reputational risks due to product quality, product security, and liability issues.
A substantial legal liability or adverse regulatory outcome and the substantial cost to defend the litigation or regulatory actions may have an adverse effect on Sony’s reputation, operating results and financial condition. - 14 - Table of Contents Sony is subject to financial and reputational risks due to product quality, product security, and liability issues.
These operations and services, as well as Sony’s business information, may be intentionally or inadvertently compromised by malicious third parties, including state-sponsored organizations, criminal organizations, Sony’s - 13 - Table of Contents officers or employees, third-party service providers or other business partners.
These operations and services, as well as Sony’s business information, may be intentionally or inadvertently compromised by malicious third parties, including state-sponsored organizations, criminal organizations, Sony’s officers or employees, third-party service providers or other business partners.
Sony invested 237.1 billion yen and 355.9 billion yen of capital in the fiscal years ended March 31, 2022 and 2023, respectively, mainly for the purpose of increasing image sensor production capacity. Further, Sony is implementing initiatives for restructuring and transformation to enhance profitability, business autonomy and shareholder value or to clearly position each business within the overall business portfolio.
Sony invested 355.9 billion yen and 339.6 billion yen of capital in the fiscal years ended March 31, 2023 and 2024, respectively, mainly for the purpose of increasing image sensor production capacity. Further, Sony is implementing initiatives for restructuring and transformation to enhance profitability, business autonomy and shareholder value or to clearly position each business within the overall business portfolio.
For example, in the ET&S, I&SS and G&NS segments, production and procurement of products, parts and components in China and other Asian countries and regions increase the time necessary to supply products to other markets worldwide, which can make it more difficult to meet changing customer demand in a timely manner.
For example, in the Entertainment, Technology & Services (“ET&S”), I&SS and G&NS segments, production and procurement of products, parts and components in China and other Asian countries and regions increase the time necessary to supply products to other markets worldwide, which can make it more difficult to meet changing customer demand in a timely manner.
In the fiscal year ended March 31, 2023, Sony acquired 100% of the shares of - 7 - Table of Contents Bungie, Inc. (“Bungie”) an independent videogame developer in the United States; made an additional strategic investment in Epic Games; and established a joint venture with Honda Motor Co., Ltd. in the mobility field.
For example, in the fiscal year ended March 31, 2023, Sony acquired 100% of the shares of Bungie, Inc. (“Bungie”) an independent videogame developer in the United States; made an additional strategic investment in Epic Games, Inc. (“Epic Games”); and established a joint venture with Honda Motor Co., Ltd. in the mobility field.
As of March 31, 2023, the unrecognized deferred tax assets amounted to 237.3 billion yen. An increase in unrecognized deferred tax assets may have an adverse impact on Sony’s operating results and financial condition. Deferred tax assets are evaluated on a jurisdiction by jurisdiction basis.
As of March 31, 2024, the unrecognized deferred tax assets amounted to 242.1 billion yen. An increase in unrecognized deferred tax assets may have an adverse impact on Sony’s operating results and financial condition. Deferred tax assets are evaluated on a jurisdiction-by-jurisdiction basis.
Consequently, foreign exchange rate fluctuations have had and may have an adverse impact on Sony’s operating results, especially when the yen or the euro weaken significantly against the U.S. dollar, when the yen - 10 - Table of Contents strengthens significantly against the euro, or when the U.S. dollar strengthens against emerging market currencies.
Consequently, foreign exchange rate fluctuations have had and may have an adverse impact on Sony’s operating results, especially when the yen weakens significantly against the U.S. dollar, when the yen strengthens significantly against the euro, or when the U.S. dollar strengthens against emerging market currencies.
As a global company, Sony is subject to the laws and regulations of many countries throughout the world that affect its business operations in a number of areas, including advertising, promotions, consumer protection, import and export requirements, anti-corruption, anti-trust, environmental protection (including decarbonizing regulations in connection with actions against climate change), data privacy and data protection, content and broadcast regulation, intellectual property, labor, product liability, taxation (including taxes from certain revenue on digital services), foreign investment, government procurement, foreign exchange controls, and economic sanctions.
As a global company, Sony is subject to the laws and regulations of many countries throughout the world that affect its business operations in a number of areas, including advertising, promotions, consumer protection, import and export requirements, anti-corruption, anti-trust, environmental protection (including decarbonizing regulations in connection with actions against climate change and regulations on the use and/or spillage of hazardous substances such as specific organic fluorine compounds), data privacy and data protection, content and broadcast regulation, development and utilization of AI, intellectual property, labor, occupational health and safety, product liability, taxation (including taxes from certain revenue on digital services), foreign investment, government procurement, foreign exchange controls, and economic sanctions.
Changes in interest rates, foreign exchange rates and the value of Japanese government and corporate bonds, U.S. treasury bonds, equities, real estate and other asset classes may have an adverse effect on the operating results and financial condition of the Financial Services segment.
Changes in interest rates, foreign exchange rates, inflation rate and the value of Japanese government and corporate bonds, U.S. treasury bonds, equities, real estate and other asset classes as well as changes in the implied volatility of interest rates, stock prices and exchange rates may have an adverse effect on the operating results and financial condition of the Financial Services segment.
For a more detailed discussion on the requirements and procedures regarding the prior notifications under the Foreign Exchange Regulations, refer to “D. Exchange Controls” in “Item 10. Additional Information .”
For a more detailed discussion on the requirements and procedures regarding the prior notifications under the Foreign Exchange Regulations, refer to “Exchange Controls” in “Item 10. Additional Information .” - 17 - Table of Contents
Such organizations or individuals may use a variety and combination of techniques, such as installing malicious software, exploiting vulnerabilities in information technology, using social engineering to mislead officers, employees and business partners into disclosing passwords and sensitive information, and coordinating distributed denial-of-service attacks to render services unavailable.
Such organizations or individuals may use a variety and combination of techniques, such as installing malicious software, exploiting vulnerabilities in information technology, using social engineering to mislead officers, employees and business partners into disclosing passwords and sensitive information, coordinating distributed denial-of-service attacks and abusing generative AI to render services unavailable. Sony has previously been the subject of cyber-attacks.
In the fiscal year ended March 31, 2023, 23.3%, 29.5% and 19.0% of Sony’s sales and financial services revenue were attributable to Japan, the U.S. and Europe, respectively. These markets may be subject to significant economic downturns, resulting in an adverse impact on Sony’s operating results and financial condition.
In the fiscal year ended March 31, 2024, 23.3%, 28.8% and 20.2% of Sony’s sales and financial services revenue were attributable to Japan, the U.S. and Europe, respectively. These markets may be subject to significant economic downturns, resulting in an adverse impact on Sony’s operating results and financial condition.
Increased regulation or public pressure in this area could cause Sony’s compliance costs to increase, particularly since Sony uses many parts, components and materials to manufacture its products and relies on suppliers to provide these parts, components and materials but does not directly control the suppliers’ procurement or employment practices.
Increased regulation or public pressure in this area could cause Sony’s compliance costs to increase, particularly since Sony uses many parts, components and materials to manufacture its products and relies on suppliers to provide these parts, components and materials.
For example, digital technology, the availability of digital media, and global internet penetration impact Sony’s ability to protect its copyrighted - 11 - Table of Contents content from unauthorized duplication, digital theft and counterfeiting, putting pressure on legitimate product sales.
For example, digital technology, the availability of digital media, global internet penetration and the proliferation of AI technology, including generative AI, impact Sony’s ability to protect its copyrighted content from unauthorized duplication, digital theft and counterfeiting, putting pressure on legitimate sales of products and services.
Sony Group Corporation is incorporated in Japan with limited liability. A majority of Sony’s directors and corporate executive officers are non-U.S. residents, and a substantial portion of the assets of Sony Group Corporation and the assets of Sony’s directors and corporate executive officers are located outside the U.S.
A majority of Sony’s directors and corporate executive officers are non-U.S. residents, and a substantial portion of the assets of Sony Group - 16 - Table of Contents Corporation and the assets of Sony’s directors and corporate executive officers are located outside the U.S.
In some jurisdictions, the use of net operating loss carryforwards or tax credits to reduce taxable income in a subsequent period is limited to a fixed percentage of taxable income or may only be used to offset taxes on - 15 - Table of Contents income from certain sources.
Sony’s operating results and financial condition could be adversely affected when the deferred tax assets expire unused. In some jurisdictions, the use of net operating loss carryforwards or tax credits to reduce taxable income in a subsequent period is limited to a fixed percentage of taxable income or may only be used to offset taxes on income from certain sources.
However, there is no assurance that third-party software developers and publishers, major contributors to this effort, will continue to develop and release software. In addition, Sony believes that integrating its hardware, software, entertainment content and network services and minimizing their energy consumption, as well as investing in R&D to effect such integration, is essential in generating revenue growth and profitability.
In addition, Sony believes that integrating its hardware, software, including AI, entertainment content and network services and minimizing their energy consumption, as well as investing in R&D to effect such integration, is essential in generating revenue growth and profitability.
Future developments or changes in laws, regulations or policies may lead to increased compliance costs or limitations on operations in the Financial Services segment. In addition, lending and borrowing between Sony’s subsidiaries in the Financial Services segment and other companies within Sony Group is strictly limited by guidelines issued by regulatory agencies in Japan.
In addition, lending and borrowing between Sony’s subsidiaries in the Financial Services segment and other companies within the Sony Group is strictly limited by guidelines issued by regulatory agencies in Japan.
As a result of anti-trust laws and regulations and anti-trust regulatory authorities becoming stricter, regulatory reviews following the signing of a definitive agreement may take longer than expected, or Sony may fail to obtain regulatory approvals, resulting in the loss of business opportunities and Sony’s inability to realize some or all of the initially expected results of mergers and acquisitions.
In some cases, the completion of mergers and acquisitions is subject to certain closing conditions, including regulatory approvals. As a result of anti-trust laws and regulations and anti-trust regulatory authorities becoming stricter, regulatory reviews following the signing of a definitive agreement may take longer than expected, or - 7 - Table of Contents Sony may fail to obtain regulatory approvals.
For example, regarding the spread of COVID-19 beginning in the 2020 calendar year, although restrictions including lockdowns have been lifted and the impact on economic activities has lessened around the world, if economic activity stagnates again due to a future resurgence of infections, it could adversely affect the procurement of components and raw materials, production, development, sale and distribution of Sony’s products and services, resulting in a negative impact on Sony’s operating results and financial position.
For example, although there is minimal economic impact from COVID-19 as of the date of this report, if economic activity stagnates again due to a future resurgence of COVID-19 and/or other infections, it could adversely affect the procurement of components and raw materials, production, development, sale and distribution of Sony’s products and services, resulting in a negative impact on Sony’s operating results and financial position.
As a global company, Sony is subject to a wide range of laws and regulations and a growing consumer focus on corporate social responsibility in many countries.
As a global company, Sony is subject to a wide range of laws and regulations in many countries and a growing focus on sustainability efforts, including corporate social responsibility from external stakeholders including shareholders, consumers, local communities and non-governmental organizations (“NGOs”).
The depositary will make efforts to vote the shares underlying ADSs in accordance with the instructions of ADS holders and will pay the dividends and distributions collected from Sony. However, ADS holders will not be able to bring a derivative action, examine Sony’s accounting books and records, or exercise appraisal rights through the depositary.
However, ADS holders will not be able to bring a derivative action, examine Sony’s accounting books and records, or exercise appraisal rights through the depositary. Sony Group Corporation is incorporated in Japan with limited liability.
Further losses in tax jurisdictions where Sony has assessed deferred tax assets as unrecognized, the inability of Sony to fully utilize its deferred tax assets, limitations on the use of its deferred tax assets under local law, exposure to additional tax liabilities or changes in Sony’s tax rates could adversely affect Sony’s operating results and financial condition.
If Sony is required to increase cash contributions to its pension plans when actuarial assumptions, such as an expected long-term rate of return of the plan assets, are updated for purposes of determining statutory contributions, it may have an adverse impact on Sony’s cash flows. - 15 - Table of Contents Further losses in tax jurisdictions where Sony has assessed deferred tax assets as unrecognized, the inability of Sony to fully utilize its deferred tax assets, limitations on the use of its deferred tax assets under local law, exposure to additional tax liabilities or changes in Sony’s tax rates could adversely affect Sony’s operating results and financial condition.
The Pictures segment’s worldwide television networks are also distributed on third-party cable, satellite and other distribution systems and the failure to renew, or the renewal on less favorable terms of, television carriage contracts (broadcasting agreements) with these third-party distributors may adversely affect the Pictures segment’s ability to generate advertising and subscription sales through these networks.
The Pictures segment’s various television networks are also distributed on third-party cable, satellite and other distribution systems and the failure to renew, or the renewal on less favorable terms of, television carriage contracts (broadcasting agreements) with these third-party distributors may adversely affect the Pictures segment’s ability to generate advertising and subscription sales through these networks. - 8 - Table of Contents Sony invests in programs to incentivize wholesalers, retailers, and other resellers and third-party distributors to position and promote Sony’s products, but there is no assurance that these programs will provide a significant return or incremental revenue by persuading consumers to buy Sony products instead of competitors’ products.
Because the depositary, through its custodian agents, is the record holder of the shares underlying the American Depositary Shares (“ADSs”), only the depositary can exercise those rights in connection with the deposited shares.
Because the depositary, through its custodian agents, is the record holder of the shares underlying the ADSs, only the depositary can exercise those rights in connection with the deposited shares. The depositary will make efforts to vote the shares underlying ADSs in accordance with the instructions of ADS holders and will pay the dividends and distributions collected from Sony.
Malicious adversaries may also use unauthorized access to Sony’s networks as a platform to compromise Sony’s third-party business partners without Sony’s knowledge. Sony has previously been the subject of sophisticated and targeted attacks.
Malicious adversaries may also use unauthorized access to Sony’s networks as a platform to compromise Sony’s third-party business partners without Sony’s knowledge. A cyber incident could result in significant remediation costs for Sony.
In addition, digital music and video distributors may increase the amount of content they create for their own services, which may reduce the demand for content created or produced by Sony. If Sony is unable to adequately respond to these changes or fails to effectively adapt to new market changes, Sony’s operating results and financial condition may be adversely impacted.
If Sony is unable to adequately respond to these changes or fails to effectively adapt to new market changes, Sony’s operating results and financial condition may be adversely impacted. - 12 - Table of Contents Changes in the regulation and performance of financial markets may adversely affect the operating results and financial condition of the Financial Services segment.
A finding of non-compliance, or the perception that Sony has not responded appropriately to growing consumer concern for such issues, whether or not Sony is legally required to do so, may adversely affect Sony’s reputation, operating results and financial condition.
A finding of non-compliance, or the perception that Sony has not responded appropriately to growing external stakeholder concern for such issues, whether or not Sony is legally required to do so, may adversely affect Sony’s reputation, operating results and financial condition. - 9 - Table of Contents Sony must manage its large volume of and widespread procurement from third-party suppliers and business partners to control inventory levels, availability, costs and quality of parts, components, materials, software and network services within volatile markets.
Sony’s sales, profitability and operations are sensitive to global and regional economic and political trends and conditions. Sony’s sales and profitability are sensitive to economic trends in its major markets, such as inflation.
Such lost sales opportunities, inventory adjustments, or shortages of parts and components have had and may have an adverse impact on Sony’s operating results and financial condition. Sony’s sales, profitability and operations are sensitive to global and regional economic and political trends and conditions. Sony’s sales and profitability are sensitive to economic trends in its major markets, such as inflation.
In addition, Sony’s officers or employees have been working both in the office and at home following the spread of COVID-19 and this practice is expected to continue.
In addition, Sony’s officers and employees continue to work both in the office and at home.
Additionally, there is a growing global regulatory and consumer focus on sustainability efforts, including corporate social responsibility and sourcing practices, as well as increasing regulatory obligations of public disclosure regarding these matters. In particular, there is increased attention on labor practices, including work environments at electronic component manufacturers, original equipment manufacturers/original design manufacturers (OEM/ODM), and product manufacturers operating in Asia.
For example, there is increased attention on labor practices, including work environments at electronic component and product manufacturers and original equipment manufacturers/original design manufacturers (OEM/ODM) operating in Asia.
Changes in the regulation and performance of financial markets may adversely affect the operating results and financial condition of the Financial Services segment. The Financial Services segment operates in industries subject to comprehensive regulation and supervision, including the Japanese insurance and banking industries.
The Financial Services segment operates in industries subject to comprehensive regulation and supervision, including the Japanese insurance and banking industries. Future developments or changes in laws, regulations or policies may lead to increased compliance costs or limitations on operations in the Financial Services segment.
For example, in the Pictures segment, as box office revenues recover as restrictions due to the spread of COVID-19 have been lifted around the world and movie theaters continue to reopen, the theatrical release calendar of films by major studios is becoming more crowded, increasing competition for available screen space.
For example, in the Pictures segment, as the number of theatrical releases increases with the resumption of production activities that had been paused due to the strikes by the Writers Guild of America (“WGA”) and the Screen Actors Guild - American Federation of Television and Radio Artists (“SAG-AFTRA”) in 2023, the theatrical release calendar of films by major studios could become more crowded, increasing competition for available screen space.
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This situation could adversely affect the operating results of the Pictures segment.
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In addition, the evolution of innovative technologies such as generative artificial intelligence (“AI”) and the use of them by competitors may disrupt Sony’s existing business models.
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For example, in the fiscal year ended March 31, 2022, Sony made an additional strategic investment in Epic Games, Inc.
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However, there is no assurance that third-party software developers and publishers, major contributors to this effort, will continue to develop and release software.
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(“Epic Games”), in which Sony already held a minority interest; acquired 100% of the shares and related assets of certain subsidiaries of Kobalt Music Group Limited (“Kobalt”) including AWAL, Kobalt’s music distribution business mainly for independent recording artists, and Kobalt Neighbouring Rights, Kobalt’s music neighboring rights management business; acquired 100% of the equity interest in Ellation Holdings, Inc.
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Also, closing conditions for mergers and acquisitions, which are set forth in definitive agreements, may not be satisfied due to unanticipated changes in the strategies or financial conditions of the organizations to be merged or acquired, leading to mergers and acquisitions not proceeding as expected, or the definitive agreements being changed or terminated.
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(“Ellation”), a subsidiary of AT&T Inc. which operated the anime business Crunchyroll; made a minority investment in Japan Advanced Semiconductor Manufacturing Inc., a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC); and acquired 100% of the shares and related assets of Som Livre, an independent music label in Brazil.
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As a result, Sony may lose business opportunities and may not realize some or all of the initially expected results of mergers and acquisitions.
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In some cases, the completion of mergers and acquisitions is subject to certain closing conditions, including regulatory approvals.
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As of the date of this report, Sony Group Corporation has been making concrete preparations for an execution of a partial spin-off (the “Spin-off”) of Sony Financial Group Inc. (“SFGI”), which operates the Financial Services business, and the listing of the shares of SFGI in October 2025.
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As of the date of this report, mergers and acquisitions that Sony has already signed definitive agreements for and whose completion is subject to regulatory approvals include the merger of Sony Pictures Networks India (“SPNI”) with Zee Entertainment Enterprises Ltd. (“Zee”), a publicly listed Indian media and content company.
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Items to be assessed for the execution of the Spin-off include the listing market(s) for the shares of SFGI, the necessary steps for dividends in kind in relation to the holders of American Depositary Shares (“ADSs”) of Sony Group Corporation, and the possibility of satisfying the requirements for tax-free treatment in some countries.
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Sony invests in programs to incentivize wholesalers, retailers, and other resellers and third-party distributors to position and promote Sony’s products, but there is no assurance that these programs will provide a significant return or incremental revenue by persuading consumers to buy Sony products instead of competitors’ products.
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At this time, there is no guarantee that the Spin-off would satisfy the requirements for tax-free treatment in each country, including Japan. The execution and timing of the Spin-off are subject to approvals, certifications and/or permissions by the relevant stock exchange(s) and other relevant authorities regarding the steps that are ultimately selected after the assessment of these items.
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Sony must manage its large volume of and widespread procurement from third-party suppliers and business partners to control inventory levels, availability, costs and quality of parts, components, materials, software and network services within volatile markets.
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In addition, regulators in Europe, the United States, and other countries are moving forward with legislation related to AI. As Sony develops and uses AI, there is a possibility that the cost of complying with these laws and regulations may increase.
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For - 9 - Table of Contents example, the Entertainment Technology & Services (“ET&S”)* segment was affected by the global shortage of semiconductors and other components, which became pronounced from the latter half of the fiscal year ended March 31, 2021 through the first half of the fiscal year ended March 31, 2023 and caused Sony to continue to be unable to fully meet market demand.
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Additionally, there is a growing global focus by regulators and external stakeholders on sustainability efforts, including those relating to climate change and the protection of human rights in supply chains, as well as increasing regulatory obligations of public disclosures regarding these matters.
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Such lost sales opportunities, inventory adjustments, or shortages of parts and components have had and may have an adverse impact on Sony’s operating results and financial condition. * The former Electronics Products & Solutions (EP&S) segment was renamed the Entertainment, Technology & Services (ET&S) segment effective from April 2022.
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Reliance on third-party software and technologies may make it increasingly difficult for Sony to differentiate its products from competitors’ products.
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For example, in the Pictures segment, the Writers Guild of America (“WGA”) went on strike effective May 2, 2023. If this strike is prolonged, it may adversely affect the operating results of the Pictures segment.
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For example, in the Pictures segment, WGA and SAG-AFTRA went on strike from May to September 2023 and from July to November 2023, respectively.
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For example, network services in the G&NS segment, the internal network and IT infrastructure in the Pictures segment, and Sony’s websites have been subject to cyber-attacks, resulting in unauthorized access, denial of service, and the theft and/or disclosure of Sony’s business information, including officer and employee information, customer information, and other information, as well as the destruction of data.
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These strikes resulted in adverse effects such as an impact on Sony’s ability to produce content which has led to release date changes for some theatrical releases in Motion Pictures and delays in deliveries of television series in Television Productions.

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Biggest changeEnabling every employee to thrive follows the philosophy of Masaru Ibuka, one of Sony’s founders, who said “we had a spirit of autonomy and a belief in creating workplaces that do not offer charity, but rather create an environment that makes it possible for individuals with disabilities to manufacture products that exceed those manufactured by individuals without disabilities.” To this end, Sony is focused on complying with the laws and norms of each country and region and aims to create an inclusive work environment that enables career building regardless of disabilities, and the entire Group is working to achieve this goal.
Biggest changeIn Japan, Sony has expanded various personnel programs to support same-sex partners, provide gender-neutral restrooms, implement policies providing job applicants the option not to indicate their gender on job applications, and provide private restrooms and shower facilities in each room at corporate dormitories, all measures aimed at ensuring a working environment that is inclusive of diverse employees. • Promoting greater opportunities for individuals with disabilities Enabling every employee to thrive follows the philosophy of Masaru Ibuka, one of Sony’s founders, who said “we had a spirit of autonomy and a belief in creating workplaces that do not offer charity, but rather create an environment that makes it possible for individuals with disabilities to manufacture products that exceed those manufactured by individuals without disabilities.” To this end, Sony is committed to complying with the disability-related laws and norms of each country and region.
Virtual PPA (Power Purchase Agreement) using the FIP (Feed-in-Premium) system in Japan. • Promotion of energy-efficient products: Acceleration of initiatives to reduce annual power consumption of Sony products. • Strengthening efforts with partners: Encouragement of business partners engaged in parts, materials and finished product manufacturing to manage their GHG emissions, save energy, and convert to renewable energy. • Contribution to carbon removal/fixation (*3): Exploration of investments in start-ups engaged in carbon removal, and development of an index integrating biodiversity and carbon fixation associated with augmented ecosystem businesses, such as Synecoculture ™ (*4) being rolled out by SynecO, Inc. *3 Process by which carbon from the atmosphere is converted into organic compounds. *4 Synecoculture is a trademark of Sony Group Corporation. - 30 - Table of Contents • DE&I Refer to “(3) Human Capital Strategies, Metrics and Targets” for DE&I strategies. • Respect for Human Rights Sony’s policy requiring respect for human rights is set forth in the Sony Group Code of Conduct.
Virtual PPA (Power Purchase Agreement) using the FIP (Feed-in-Premium) system in Japan. • Promotion of energy-efficient products: Acceleration of initiatives to reduce annual power consumption of Sony products. • Strengthening efforts with partners: Encouragement of business partners engaged in parts, materials and finished product manufacturing to manage their GHG emissions, save energy, and convert to renewable energy. • Contribution to carbon removal/fixation (*3): Exploration of investments in start-ups engaged in carbon removal, and development of an index integrating biodiversity and carbon fixation associated with augmented ecosystem businesses, such as Synecoculture ™ (*4) being rolled out by SynecO, Inc. *3 Process by which carbon from the atmosphere is converted into organic compounds. *4 Synecoculture is a trademark of Sony Group Corporation. • DE&I - 31 - Table of Contents Refer to “(3) Human Capital Strategies, Metrics and Targets” for DE&I strategies. • Respect for Human Rights Sony’s policy requiring respect for human rights is set forth in the Sony Group Code of Conduct.
Furthermore, Sony Group Corporation subleases its Right-of-use assets mainly to subsidiaries and affiliates in Japan. *4 “Others” primarily includes Sony City Osaki and Atsugi TEC. *5 Figures for Sony Network Communications Inc., Sony Music Entertainment (Japan) Inc., Sony Financial Group Inc., Sony Corporation of America, Sony Interactive Entertainment LLC and Sony Europe B.V. are consolidated financial figures, which include their subsidiaries’ figures.
Furthermore, Sony Group Corporation subleases its Right-of-use assets mainly to subsidiaries and affiliates in Japan. *4 “Others” primarily includes Sony City Osaki and Atsugi TEC. *5 Figures for Sony Network Communications Inc., Sony Music Entertainment (Japan) Inc., Sony Financial Group Inc., Sony Corporation of America, Sony Interactive Entertainment LLC, Sony Interactive Entertainment Europe Ltd. and Sony Europe B.V. are consolidated financial figures, which include their subsidiaries’ figures.
SMP is a U.S.-based music publishing business that owns and acquires rights to musical compositions, exploiting and marketing these compositions and receiving royalties or fees for their use. Visual Media and Platform: “Visual Media and Platform” includes the production and distribution of animation titles and game applications, and various service offerings for music and visual products.
SMP is a U.S.-based music publishing business that owns, administers and acquires rights to musical compositions, exploiting and marketing these compositions and receiving royalties or fees for their use. Visual Media and Platform: “Visual Media and Platform” includes the production and distribution of animation titles and game applications, and various service offerings for music and visual products.
SPE’s television networks and streaming services (including Crunchyroll primarily in North America and SonyLIV in India) are distributed through digital platforms, cable, DBS providers and telecommunications companies to viewers around the world. These networks and services generate advertising, subscription and other ancillary revenues. Financial Services Sony Life conducts its life insurance business primarily in Japan.
SPE’s television networks and streaming services (including Crunchyroll, primarily in North America and Europe, and SonyLIV in India) are distributed through digital platforms, cable, DBS providers and telecommunications companies to viewers around the world. These networks and services generate advertising, subscription and other ancillary revenues. Financial Services Sony Life conducts its life insurance business in Japan.
For example, semiconductors, LCD panels and other discrete components, which are used in multiple applications, can influence Sony’s performance when the availability of such parts and components is significantly limited. Additionally, rising energy costs and market prices may cause prices of parts, components and raw materials to increase, which may adversely affect Sony’s financial results.
For example, semiconductors, LCD panels and other components, which are used in multiple applications, can influence Sony’s performance when the availability of such parts and components is significantly limited. Additionally, rising energy costs and market prices may cause prices of parts, components and raw materials to increase, which may adversely affect Sony’s financial results.
Sony believes that it is an important mission of Sony to lead and contribute to the resolution of sustainability issues not only by increasing business revenue through the technologies and products Sony develops, but also by having a positive impact on society and the environment. • Climate Change Under the “Road to Zero,” a long-term environmental plan established in 2010 that aims to achieve a zero environmental footprint for the entire Sony Group by the year 2050, Sony is promoting environmental impact reduction activities in each of the following four perspectives: climate change, resources, chemical substances, and biodiversity.
Sony believes that it has an important mission to lead and contribute to the resolution of sustainability issues not only by increasing business revenue through the technologies, products and services it develops, but also by having a positive impact on society and the environment. • Climate Change Under the “Road to Zero,” a long-term environmental plan established in 2010 that aims to achieve a zero environmental footprint for the entire Sony Group by the year 2050, Sony is promoting environmental impact reduction activities in each of the following four perspectives: climate change, resources, chemical substances, and biodiversity.
SPE’s library of motion pictures and television programming is licensed to distributors such as broadcast television networks, digital platforms, cable networks and DBS providers. Digital platforms include subscription and advertising supported platforms (including Sony’s PlayStation ™ Network, Netflix and Amazon Prime Video).
For television, SPE’s library of motion pictures and television programming is licensed to distributors such as broadcast television networks, digital platforms, cable networks and DBS providers. Digital platforms include subscription and advertising supported platforms (including Sony’s PlayStation ™ Network, Netflix and Amazon Prime Video).
The acquired company changed its name to Sony Music Entertainment Inc. in January 1991 and then to Sony Music Holdings Inc. in December 2008. In November 1989, Sony Group Corporation acquired Columbia Pictures Entertainment, Inc. in the U.S. In August 1991, Columbia Pictures Entertainment, Inc. changed its name to Sony Pictures Entertainment Inc.
The acquired company changed its name to Sony Music Entertainment Inc. in January 1991 and then to Sony Music Holdings Inc. in December 2008. In November 1989, Sony Group Corporation acquired Columbia Pictures Entertainment, Inc. in the U.S. In August 1991, Columbia Pictures Entertainment, Inc. changed its name to Sony Pictures Entertainment Inc. (“SPE”).
Sony defines materiality as “material topics that are related to sustainability, impact Sony’s value creation, and are determined with longer-term social change and diverse stakeholder needs in mind.” The Sustainability Department most recently refreshed the materiality analysis in the fiscal year ended March 31, 2023 and evaluated sustainability issues which are highly relevant to Sony, including items that have a negative impact on Sony’s value creation from the perspectives of their importance to both Sony and its stakeholders.
Sony defines material topics as “important topics that are related to sustainability, impact Sony’s value creation, and are determined with longer-term social change and diverse stakeholder needs in mind.” The Sustainability Department most recently refreshed the materiality analysis in the fiscal year ended March 31, 2023 and evaluated sustainability issues which are highly relevant to Sony, including items that have a negative impact on Sony’s value creation, from the perspectives of their importance to both Sony and its stakeholders.
Sony is not aware of any other activity, transaction or dealing by Sony Group Corporation or any of its affiliates during the fiscal year ended March 31, 2023 that is disclosable in this report under Section 13(r) of the Exchange Act.
Sony is not aware of any other activity, transaction or dealing by Sony Group Corporation or any of its affiliates during the fiscal year ended March 31, 2024 that is disclosable in this report under Section 13(r) of the Exchange Act.
SPE also operates Sony Pictures Imageworks, a visual effects and animation unit, and manages a studio facility, Sony Pictures Studios, which includes post-production facilities. - 20 - Table of Contents Television Productions: “Television Productions” includes the worldwide production, acquisition and distribution of programming, including scripted series, unscripted “reality” or “light entertainment,” daytime serials, game shows, animated series, made for television movies and miniseries and other programming.
SPE also operates Sony Pictures Imageworks, a visual effects and animation unit, and manages a studio facility, Sony Pictures Studios, which includes post-production facilities. Television Productions: “Television Productions” includes the worldwide production, acquisition and distribution of programming, including scripted series, unscripted “reality” or “light entertainment,” daytime serials, game shows, animated series, made for television movies and miniseries and other programming.
In recruitment activities, Sony strategically works with all Sony Group companies worldwide to attract world-class talent, and also focuses on industry-academia collaboration as a mid- to long-term measure to develop diverse talent pipelines. Sony is also globally providing opportunities that lead to the success of employees with various business, regional, and social backgrounds.
In recruitment activities, Sony strategically collaborates with all Sony Group companies globally to attract world-class talent, and also focuses on industry-academia collaboration as a mid- to long-term measure to develop diverse talent pipelines. Sony is also providing opportunities globally that lead to the success of employees with various business, regional, and social backgrounds.
Expectations are also rising for corporate initiatives to address social issues such as social justice and inequality, and Sony believes that it is important for the Sony Group to further promote initiatives aimed at resolving issues both inside and outside the Group. - 29 - Table of Contents • Respect for Human Rights: Sony is aware of the potential human rights impacts of its global business activities.
Expectations are also rising for corporate initiatives to address social issues such as social justice and inequality, and Sony believes that it is important for the Sony Group to further promote initiatives aimed at resolving issues both inside and outside the Sony Group. • Respect for Human Rights: Sony is aware of the potential human rights impacts of its global business activities.
Sony is aware that certain transactions during the fiscal year ended March 31, 2023, as described below, may be disclosable pursuant to Section 13(r) of the Exchange Act.
Sony is aware that certain transactions during the fiscal year ended March 31, 2024, as described below, may be disclosable pursuant to Section 13(r) of the Exchange Act.
For example, SME has its own framework, “MILES,” for fostering DE&I that contributes to industry development, and SPE has the “Sony Pictures Action” program, which focuses on four pillars — people, content, partners, and community — to provide support for those who are socially disadvantaged.
For example, in the U.S., SME has its own framework, “MILES,” for fostering DE&I that contributes to industry development, and SPE has the “Sony Pictures Action” program, which focuses on four pillars—people, content, partners and community—to provide support for those who are socially disadvantaged.
The importance of topics from Sony’s perspective is evaluated from the perspective of positive or negative impact on Sony’s ability to create value over the mid- to long-term, while the importance of topics from the stakeholders’ perspective is evaluated based on information published by non-governmental organizations (NGOs), investors, rating agencies, mass media and other sources.
The importance of topics from Sony’s perspective is evaluated from the perspective of positive or negative impact on Sony’s ability to create value over the mid- to long-term, while the importance of topics from the stakeholders’ perspective is evaluated based on information published by NGOs, investors, rating agencies, mass media and other sources.
Sony has been strengthening its framework for AI ethics with initiatives such as establishing an internal document stipulating requirements to be complied with in the commercialization process of electronic products and services, and starting AI ethics assessments in the product development life cycle.
Sony has been strengthening its framework for AI - 32 - Table of Contents ethics with initiatives such as establishing an internal document stipulating requirements to be complied with in the commercialization process of electronic products and services, and starting AI ethics assessments in the product development life cycle.
(“Sony Life With”) on April 1, 2020. On April 1, 2021, Sony Life undertook an absorption-type merger with Sony Life With, with Sony Life as the surviving company. Furthermore, Sony Life completed the liquidation of SA Re in March 2023. Sony Assurance has conducted a non-life insurance business in Japan since October 1999.
On April 1, 2021, Sony Life undertook an absorption-type merger with Sony Life With, with Sony Life as the surviving company. Furthermore, Sony Life completed the liquidation of SA Re in March 2023. Sony Assurance has conducted a non-life insurance business in Japan since October 1999.
(ii) “Develop talented individuals” Sony believes that the most effective way for our employees to grow is to provide them with job opportunities where they have autonomy and are able to demonstrate their desire to grow by taking on new challenges.
(ii) “Develop talented individuals” Sony believes that the most effective way to develop employees is to provide them with job opportunities where they have autonomy and are able to demonstrate their desire to grow by taking on new challenges.
Digital networks include Crunchyroll, a streaming service based in North America primarily focused on anime content, and SonyLIV, a general entertainment streaming service in India. Entertainment, Technology & Services (ET&S) TV and Audio & Video: Sony Corporation undertakes product research, development, design, marketing, sales, production, distribution and customer services for televisions and video and sound products.
Digital networks include Crunchyroll, a streaming service based in North America primarily focused on anime content, and SonyLIV, a general entertainment streaming service in India. - 21 - Table of Contents Entertainment, Technology & Services (ET&S) TV and Audio & Video: Sony Corporation undertakes product research, development, design, marketing, sales, production, distribution and customer services for televisions and video and sound products.
Sony believes that it is important to respect our employees’ diverse values, remember the importance of equity, and foster an inclusive organizational culture.
Sony believes that it is important to respect its employees’ diverse values, remember the importance of equity, and foster an inclusive organizational culture.
No material revenues or profits are associated with these transactions with the Iranian government-owned entities. • A non-U.S. subsidiary of Sony entered into an agreement in March 2023 for the sale of medical instruments, namely, a medical printer and accompanying print media, to a third-party-owned distributor in Japan, which will be delivered to a hospital in Tehran that is under the control of the Iranian Ministry of Health and Medical Education, pursuant to Japan International Cooperation Agency’s (JICA) provision of grant aid to supply certain medical equipment to hospitals in Tehran as part of the - 27 - Table of Contents Government of Japan’s Official Development Assistance (“ODA”).
No material revenues or profits are associated with these transactions with the Iranian government-owned entities. • As previously reported, a non-U.S. subsidiary of Sony entered into an agreement in March 2023 for the sale of medical instruments, namely, a medical printer and accompanying print media, to a third-party-owned distributor in Japan, which will be delivered to a hospital in Tehran that is under the control of the Iranian Ministry of Health and Medical Education, pursuant to Japan International Cooperation Agency’s (JICA) provision of grant aid to supply certain medical equipment to hospitals in Tehran as part of the Government of Japan’s Official Development Assistance (ODA).
Sony Storage Media Solutions Corporation sells its storage media products through its own sales forces, as well as through Sony’s sales companies mentioned in the above description of Sales and Distribution for the G&NS, ET&S and I&SS segments.
Sony Storage Media Solutions - 24 - Table of Contents Corporation sells its storage media products through its own sales forces, as well as through Sony’s sales companies mentioned in the above description of Sales and Distribution for the G&NS, ET&S and I&SS segments.
The Insurance Business Act specifies the types of - 26 - Table of Contents businesses insurance companies may engage in, imposes limits on the types and amounts of investments that can be made and requires insurance companies to maintain specified reserves and a minimum solvency margin ratio.
The Insurance Business Act specifies the types of businesses insurance companies may engage in, imposes limits on the types and amounts of investments that can be made and requires insurance companies to maintain specified reserves and a minimum solvency margin ratio.
Sony owns and acquires rights to musical compositions, exploits and markets these compositions, receives royalties or fees for their use and conducts its music publishing business in countries other than Japan under the Sony Music Publishing name. - 22 - Table of Contents SMEJ creates artwork and produces packaged home entertainment products including music and games.
Sony owns and acquires rights to musical compositions, exploits and markets these compositions, receives royalties or fees for their use and conducts its music publishing business in countries other than Japan under the Sony Music Publishing name. SMEJ creates artwork and produces packaged home entertainment products including music and games.
Based on such analysis, the most important topics that should be prioritized for Sony have been identified after review by the Senior Executives in charge of Sony’s headquarters functions and the Board of Directors.
Based on such analysis, the most important topics that should be prioritized across the Sony Group have been identified after review by the Senior Executives in charge of Sony’s headquarters functions and the Board of Directors.
For this reason, Sony systematizes the skills required according to the roles of employees and aims to strengthen each skill throughout the Group. Sony strongly believes that management-level employees play an important role in the growth of the Sony Group and its employees.
For this reason, Sony systematizes the skills required according to the roles of employees and aims to strengthen their skills throughout the Sony Group. Sony strongly believes that management-level employees play an important role in the growth of the Sony Group and its employees.
In September 2020, SFH became a wholly-owned subsidiary of Sony Group Corporation through Sony’s tender offer for the common shares and the related stock acquisition rights of SFH and the subsequent procedures for the purchase of all of SFH’s remaining common shares. In October 2021, SFH changed its company name to Sony Financial Group Inc. (“SFGI”).
In September 2020, SFH became a wholly-owned subsidiary of Sony Group Corporation through Sony’s tender offer for the common shares and the related stock acquisition rights of SFH and the subsequent procedures for the purchase of all of SFH’s remaining common shares. In October 2021, SFH changed its company name to SFGI.
Sony’s management team and HR departments discuss the direction for the mid-term development training and strengthening of the Group’s management and provide management-level employees with various programs such as leadership development and coaching, which aim to expand horizons and increase experience in a broad range of fields.
Sony’s management team and HR departments discuss - 33 - Table of Contents the direction for the mid-term development training and strengthening of the Sony Group’s management and provide management-level employees with various programs such as leadership development and coaching, which aim to expand horizons and increase experience in a broad range of fields.
For electronic components, Sony sells products directly to wholesalers and manufacturers. United States: Sony markets its electronics products and services in these segments through Sony Electronics Inc. and other wholly-owned subsidiaries in the U.S.
It also markets professional electronics products and services. For electronic components, Sony sells products directly to wholesalers and manufacturers. United States: Sony markets its electronics products and services in these segments through Sony Electronics Inc. and other wholly-owned subsidiaries in the U.S.
Additionally, Sony has established the “Sony University” program, which was designed to nurture future leaders who will play a key role in each business segment and function.
Additionally, Sony has established the “Sony University” program, which was designed to nurture future leaders who are expected to play a key role in each business segment and function.
Imaging & Sensing Solutions (I&SS) SSS and its subsidiary Sony Semiconductor Manufacturing Corporation undertake product research, development, design, manufacturing, marketing, sales, production, distribution and customer services primarily for complementary metal oxide semiconductor (“CMOS”) image sensors, in addition to charge-coupled devices (CCDs), large-scale integration systems (LSIs) and other semiconductors.
Imaging & Sensing Solutions (I&SS) SSS and its subsidiary Sony Semiconductor Manufacturing Corporation undertake product research, development, design, manufacturing, marketing, sales, production, distribution and customer services primarily for complementary metal oxide semiconductor (“CMOS”) image sensors, in addition to display devices, lasers, large-scale integration systems (LSIs) and other semiconductors.
In July 2018, Sony completed the acquisition of the Estate’s equity interest in Nile, resulting in Sony owning approximately 40% of the equity interest in EMI. In November 2018, Sony completed the acquisition of the remaining approximately 60% equity interest in EMI, - 18 - Table of Contents resulting in EMI becoming a wholly-owned subsidiary of Sony.
In July 2018, Sony completed the acquisition of the Estate’s equity interest in Nile, resulting in Sony owning approximately 40% of the equity interest in EMI. In November 2018, Sony completed the acquisition of the remaining approximately 60% equity interest in EMI, resulting in EMI becoming a wholly-owned subsidiary of Sony.
Sales and Distribution G&NS, ET&S and I&SS In the G&NS segment, PlayStation ® hardware and peripheral devices, software and content and network services are marketed and distributed by Sony Interactive Entertainment LLC, Sony Interactive Entertainment - 21 - Table of Contents Inc. and Sony Interactive Entertainment Europe Ltd.
Sales and Distribution G&NS, ET&S and I&SS In the G&NS segment, PlayStation ® hardware and peripheral devices, software and content and network services are marketed and distributed by Sony Interactive Entertainment LLC, Sony Interactive Entertainment Inc. and Sony Interactive Entertainment Europe Ltd.
Sony considers its overall license position beneficial to its operations. Competition In each of its principal product lines and services, Sony encounters intense competition throughout the world.
Sony considers its overall license position beneficial to its operations. - 25 - Table of Contents Competition In each of its principal product lines and services, Sony encounters intense competition throughout the world.
(“SPE”). - 17 - Table of Contents In November 1993, Sony Group Corporation established Sony Computer Entertainment Inc. in Japan. Sony Computer Entertainment Inc. changed its name to Sony Interactive Entertainment Inc. in April 2016. In October 1995, Sony/ATV Music Publishing LLC (“Sony/ATV”) was formed as a 50-50 joint venture company between Sony Group Corporation and Michael Jackson.
In November 1993, Sony Group Corporation established Sony Computer Entertainment Inc. in Japan. Sony Computer Entertainment Inc. changed its name to Sony Interactive Entertainment Inc. in April 2016. In October 1995, Sony/ATV Music Publishing LLC (“Sony/ATV”) was formed as a 50-50 joint venture company between Sony Group Corporation and Michael Jackson.
Operating and Financial Review and Prospects. ” The funding requirements of such various capital expenditures are expected to be financed by cash provided principally by operating and financing activities or the existing balance of cash and cash equivalents. In the fiscal year ended March 31, 2023, Sony invested approximately 381.1 billion yen in the I&SS segment.
Operating and Financial Review and Prospects. ” The funding requirements of such various capital expenditures are expected to be financed by cash provided principally by operating and financing activities or the existing balance of cash and cash equivalents. In the fiscal year ended March 31, 2024, Sony invested approximately 378.2 billion yen in the I&SS segment.
Sony Life’s core business is providing death protection and other insurance products to individuals, primarily through a consulting-based sales approach utilizing its experienced team of Lifeplanner ® sales specialists as well as partner independent sales agents. Sony Life provides tailor-made life insurance products that are optimized for each customer.
Sony Life’s core business is providing death protection and other insurance products to individuals, primarily through a consulting-based sales approach utilizing its experienced team of Lifeplanner sales specialists as well as partner independent sales agents. Sony Life provides tailor-made life insurance products that are optimized for each customer. As of March 31, 2024, Sony Life employed 5,516 Lifeplanner sales specialists.
Considering recent changes in the external environment related to respect for human rights, Sony believes that it is important to further strengthen its efforts in this area. • Technology for Sustainability: Sony recognizes that our stakeholders have expectations regarding our ability to both grow our business and solve social and environmental issues through technology.
Considering recent changes in the external environment related to respect for human rights, Sony believes that it is important to further strengthen its efforts in this area. - 30 - Table of Contents • Technology for Sustainability: Sony recognizes that its stakeholders have expectations regarding Sony’s ability to both grow its business and solve social and environmental issues through technology.
Principal Capital Investments In the fiscal years ended March 31, 2022 and 2023, Sony’s capital expenditures were 697.2 billion yen and 809.6 billion yen, respectively. For a breakdown of principal capital expenditures and divestitures (including interests in other companies), refer to “Item 5.
Principal Capital Investments In the fiscal years ended March 31, 2023 and 2024, Sony’s capital expenditures were 809.6 billion yen and 882.6 billion yen, respectively. For a breakdown of principal capital expenditures and divestitures (including interests in other companies), refer to “Item 5.
Under this policy, Sony established and implemented Group policies specific to the human rights area, such as the “Sony Supply Chain Code of Conduct” which sets forth the code of conduct for Sony’s own manufacturing sites and suppliers, and aims to work towards a responsible supply chain, and the “Sony Group AI Ethics Guidelines,” which guide all Sony officers and employees to utilize artificial intelligence (“AI”) and/or conduct AI-related R&D in a manner that conforms with our values and emerging social norms.
Under this policy, Sony established and implemented Group policies for specific areas regarding human rights, such as the “Sony Supply Chain Code of Conduct” which sets forth the code of conduct for Sony’s own manufacturing sites and suppliers, with the aim to work towards a responsible supply chain, and the “Sony Group AI Ethics Guidelines,” which guide all Sony officers and employees to utilize AI and/or conduct AI-related R&D in a manner that conforms with Sony’s values and emerging social norms.
The worldwide home entertainment distribution of SPE’s motion pictures and television programming (and product acquired or licensed from others) is handled through Sony Pictures Home Entertainment, except in certain countries where SPE has joint distribution or sub-distribution arrangements with other studios, or arrangements with independent local distributors.
In certain countries, however, SPE has joint distribution or sub-distribution arrangements with other studios, or arrangements with independent local distributors or other entities. - 23 - Table of Contents The worldwide home entertainment and television distribution of SPE’s motion pictures and television programming (and product acquired or licensed from others) is handled through SPE’s Sony Pictures Home Entertainment/Television Distribution group, except in certain countries where SPE has joint distribution or sub-distribution arrangements with other studios, or arrangements with independent local distributors.
Sales for the third quarter ending December 31 of each fiscal year are generally higher than other quarters of the same fiscal year mainly in the G&NS and ET&S segments due to demand during the year-end holiday season. Japan: Sony Marketing Inc. markets consumer electronics products mainly through retailers. It also markets professional electronics products and services.
Sales for the third quarter ending December 31 of each fiscal year are generally higher than other quarters of the same fiscal year mainly in the G&NS and ET&S segments due to demand during the year-end holiday season. - 22 - Table of Contents Japan: Sony Marketing Inc. markets consumer electronics products mainly through retailers.
Additionally, Bungie carries out marketing and distribution of its software, content and merchandise under its own brand as an independent studio and publisher, with support from PlayStation.
Additionally, Bungie carries out marketing and distribution of its software, content and merchandise under its own brand as an independent studio and publisher, with support from Sony Interactive Entertainment.
Certain of these licenses are important to Sony’s business. Sony products that employ Blu-ray Disc ™ player functionality, including PlayStation ® 4 and PlayStation ® 5 (“PS5 ™ ”) hardware, are substantially dependent upon patents that relate to technologies specified in the Blu-ray Disc ™ specifications and are licensed by MPEG LA LLC and One-Blue, LLC.
Certain of these licenses are important to Sony’s business. Sony products that employ Blu-ray Disc ™ player functionality, including PlayStation ® 4 and PlayStation ® 5 (“PS5 ™ ”) hardware, are substantially dependent upon patents that relate to technologies specified in the Blu-ray Disc ™ specifications and are licensed by Via Licensing Alliance LLC.
In addition, some of the Sony Group’s major businesses, such as the Pictures and Music Publishing businesses, have foreign nationals playing a major role in their operations. Approximately half of all Sony Group employees are engaged in business activities outside Japan, and more than 90% of these employees are locally hired.
(i) Diversity of people • Diversity of nationality Some of Sony’s major businesses, such as the Pictures and Music Publishing businesses, have foreign nationals playing a major role in their operations. Approximately half of all Sony Group employees are engaged in business activities outside Japan, and more than 90% of these employees are locally hired.
In addition, Sony continues to actively recruit talented students and experienced individuals from around the world, regardless of nationality, to become employees capable of enhancing global research and development and cutting-edge technology development, such as AI developed at Sony Research Inc. (formerly Sony AI Inc.).
In addition, Sony - 34 - Table of Contents continues to actively recruit talented students and experienced individuals from around the world, regardless of nationality, to become employees capable of enhancing global R&D and cutting-edge technology development, such as AI development at Sony Research Inc.
For example, Sony’s R&D regarding sensing technology that measures the water content in soil, ultra-wide area sensing network technology, and sophisticated predictive data analytics technology, is underway.
For example, Sony is carrying out R&D regarding sensing technology that measures the water content in soil, ultra-wide area sensing network technology, and sophisticated predictive data analytics technology.
(iii) Diversity of gender Sony aims to globally promote greater opportunities for women as part of our efforts to ensure an inclusive work environment in which diverse employees can play an active role.
(formerly Sony AI Inc.). • Diversity of gender Sony aims to globally promote greater opportunities for women as part of its efforts to ensure an inclusive work environment in which diverse employees can play an active role.
As of the date of this report, Sony does not anticipate that any activity, transaction or dealing that may be disclosable will be conducted during the fiscal year ending March 31, 2024, except as described above in connection with the wind-down of its representative office in Iran and the sale of medical instruments pursuant to the ODA.
As of the date of this report, Sony does not anticipate that any activity, transaction or dealing that may be disclosable will be conducted during the fiscal year ending March 31, 2025, except as described above in connection with the wind-down of its representative office in Iran.
In January 2020, Sony Life acquired from AEGON International B.V. the remaining 50% stakes of - 23 - Table of Contents AEGON Sony Life and SA Re, resulting in both AEGON Sony Life and SA Re becoming wholly-owned subsidiaries of Sony Life. AEGON Sony Life changed its trade name to Sony Life With Insurance Co., Ltd.
In January 2020, Sony Life acquired from AEGON International B.V. the remaining 50% stakes of AEGON Sony Life and SA Re, resulting in both AEGON Sony Life and SA Re becoming wholly-owned subsidiaries of Sony Life. AEGON Sony Life changed its trade name to Sony Life With Insurance Co., Ltd. (“Sony Life With”) on April 1, 2020.
At Sony, employee engagement is considered a - 32 - Table of Contents particularly important indicator and is incorporated as part of the evaluation factors of remuneration linked to business results for Senior Executives of the Corporation.
Employee engagement is considered a particularly important indicator, and is incorporated as one of the evaluation factors for remuneration linked to business results for Senior Executives of Sony Group Corporation.
SPE competes with other companies, in particular technology companies, who are expanding - 25 - Table of Contents into the production or distribution of film and television programing. In motion picture production and distribution, SPE faces competition to obtain exhibition and distribution outlets and optimal release dates for its products.
SPE competes with other companies, in particular technology companies, who are expanding into the production or distribution of film and television programing. In motion picture production and distribution, SPE faces competition to obtain exhibition and distribution outlets and optimal release dates for its products. In addition, SPE faces competition to acquire motion pictures and television programming from third parties.
Additionally, the majority of our employees at overseas Group companies have prior experience at other companies. During performance evaluation, Sony does not distinguish between employees with experience at other companies and those who started their careers at Sony.
Additionally, the majority of Sony’s employees at overseas Group companies have prior experience working for other companies or in other job types. During performance evaluation, Sony does not distinguish between employees with experience working for other companies or in other job types and those who started their careers at Sony.
In the fiscal year ended March 31, 2023, a global sustainability conference was held, where the Senior Executive in charge of Sustainability, the Senior Executive in charge of Human Resources, and sustainability personnel from the Business Units came together to confirm and share the sustainability initiatives for the Business Units and their progress on the Sustainability KPIs.
In addition, a global - 29 - Table of Contents sustainability conference was held, where the Senior Executive in charge of Sustainability, the Senior Executive in charge of Human Resources, and personnel in charge of sustainability from the Business Units came together to confirm and share sustainability initiatives for the Business Units and their progress on the Sustainability KPIs.
The sale was completed in May 2023. Sony’s expected gross revenue from the sale is approximately 267 thousand yen, and Sony estimates that its net profit from such sales is 50 thousand yen.
The transaction was completed in May 2023. Sony’s gross revenue from the sale was approximately 267 thousand yen, and Sony has estimated that its net profit from such a sale was 50 thousand yen.
As of March 31, 2023, the ratio of women to men in the workforce was 34.0% and the ratio of women to men in management positions was 30.0% at the whole Sony Group.
As of March 31, 2024, the ratio of women to men in the workforce was 34.0% and the ratio of women to men in management positions was 30.7% for the entire Sony Group.
Fiscal year ended March 31 2022 2023 (Yen in millions) Japan 2,764,321 2,691,972 United States 2,766,021 3,401,402 Europe 1,870,091 2,190,311 China 771,006 855,437 Asia-Pacific 1,149,261 1,563,414 Other Areas 600,813 837,301 Total 9,921,513 11,539,837 Sources of Supply Sony procures parts, components and raw materials used in the production of its products on a global basis on the most favorable terms that it can achieve.
Fiscal year ended March 31 2022 2023 Restated 2024 (Yen in millions) Japan 2,764,321 2,126,508 3,027,526 United States 2,766,021 3,401,402 3,751,239 Europe 1,870,091 2,190,311 2,632,963 China 771,006 855,437 1,000,907 Asia-Pacific 1,149,261 1,563,414 1,659,776 Other Areas 600,813 837,301 948,357 Total 9,921,513 10,974,373 13,020,768 Sources of Supply Sony procures parts, components and raw materials used in the production of its products on a global basis on the most favorable terms that it can achieve.
In April 2021, in connection with the above-mentioned launch of Sony Group Corporation, Sony Electronics Corporation, SHES, SIPS and Sony Mobile Communications Inc. (“SOMC”) were merged into one company, which was renamed Sony Corporation.
In April 2020, Sony established Sony Electronics Corporation, an intermediate holding company encompassing the electronics products and solutions businesses. In April 2021, in connection with the above-mentioned launch of Sony Group Corporation, Sony Electronics Corporation, SHES, SIPS and Sony Mobile Communications Inc. were merged into one company, which was renamed Sony Corporation.
In addition, SPE faces competition to acquire motion pictures and television programming from third parties. In television production and distribution, competition arises from the increasing fragmentation of audiences among broadcast and cable networks, digital platforms, DBS providers and other outlets both within and outside of the U.S.
In television production and distribution, competition arises from the increasing fragmentation of audiences among broadcast and cable networks, digital platforms, DBS providers and other outlets both within and outside of the U.S.
Sustainability Disclosure Sony’s Approach to Sustainability Sony Group Corporation has established the following basic policy on sustainability with the approval of the Board of Directors: Sony manages diverse businesses with people at the core, and aims for sustainable value creation based on such diversity and mid-to long-term growth in the Sony Group’s corporate value under its Purpose to “fill the world with emotion, through the power of creativity and technology,” and its Corporate Direction of “getting closer to people.” In order to have people connected to each other through emotion, it is necessary to create a society in which everyone can live with peace of mind in a healthy global environment.
However, there can be no assurance that Sony’s policies and procedures will be effective, and if the relevant authorities were to impose penalties or sanctions against Sony, the impact of such sanctions could be material. - 28 - Table of Contents Sustainability Disclosure Sony’s Basic Policy for Sustainability Initiatives Sony Group Corporation has established the following basic policy on sustainability with the approval of the Board of Directors: Sony manages diverse businesses with people at the core, and aims for sustainable value creation based on such diversity and mid- to long-term growth in the Sony Group’s corporate value under its Purpose to “fill the world with emotion, through the power of creativity and technology,” and its Corporate Direction of “getting closer to people.” In order to have people connected to each other through emotion, it is necessary to create a society in which everyone can live with peace of mind in a healthy global environment.
In the Financial Services segment, it is important to maintain a strong and sound financial foundation for the business as well as to meet diversifying customer needs. Sony Life and Sony Assurance have maintained a high solvency margin ratio, relative to the Japanese domestic minimum solvency margin ratio requirements.
In the Financial Services segment, it is important to maintain a strong and sound financial foundation for the business as well as to meet diversifying customer needs. Sony Life and Sony Assurance have maintained a solvency margin ratio required by the Japanese domestic criteria. Sony Bank has maintained a sufficient capital adequacy ratio required by the Japanese domestic criteria.
In addition, as part of reporting on each Business Unit’s mid-range plan, the Board of Directors receives reports from each Business Unit on the sustainability challenges and opportunities relevant to their respective business operations and their efforts in those areas.
In addition, as part of reporting on each Business Unit’s mid-range plan, the Board of Directors receives reports from each Business Unit on the sustainability challenges and opportunities relevant to their respective business operations and their efforts in those areas. Also refer to “Risk Factors” in “Item 3. Key Information ” for the risks related to sustainability.
(iii) “Engage talented individuals” To fully leverage the diversity of our employees, Sony believes that it is essential for each employee with different personalities, lifestyles, and work styles to continue to take on challenges in pursuit of growth.
(iii) “Engage talented individuals” To fully leverage the diversity of its employees, Sony believes that it is essential to create an inclusive working environment and system in which each employee with different personalities, lifestyles, and work styles can take on challenges for growth.
In April 2004, S-LCD Corporation (“S-LCD”), a joint venture between Sony Group Corporation and Samsung Electronics Co., Ltd. of Korea for the manufacture of amorphous thin film transistor LCD (liquid crystal display) panels, was established in Korea. Sony’s stake in S-LCD was 50% minus 1 share.
Sony currently plans to execute the Spin-off and list the shares of SFGI in October 2025. In April 2004, S-LCD Corporation (“S-LCD”), a joint venture between Sony Group Corporation and Samsung Electronics Co., Ltd. of Korea for the manufacture of amorphous thin film transistor LCD panels, was established in Korea. Sony’s stake in S-LCD was 50% minus 1 share.
As a group-wide initiative, Sony introduced a pride logo, a Sony logotype displayed in rainbow colors, to visually express Sony’s respect inside and outside Sony and support for LGBTQ+ employees and communities.
As a group-wide initiative, in the fiscal year ended March 31, 2023, Sony introduced a pride logo, featuring a Sony logotype in rainbow colors, to visually express Sony’s respect and support for LGBTQ+ employees and communities, both inside and outside the Sony Group.
Most of the buildings and land in/on which such offices, plants and warehouses are located are owned by Sony. - 35 - Table of Contents The status of major property, plants and equipment as of March 31, 2023 is as follows: Facility or Subsidiary Name (Primary Location) Segment Details Carrying Amount (Yen in millions) Number of employees *2 Land (Area (thousand square meters)) Buildings Machinery, equipment and other assets *1 Right-of-use assets In Japan (Sony Group Corporation *3 ): Headquarters (Minato-ku, Tokyo) Corporate Headquarters facilities 1,275 (19 ) 21,862 14,681 — 1,435 Others *4 Corporate Headquarters facilities 6,582 (305 ) 34,544 3,718 — 1,010 In Japan (Subsidiaries): Sony Interactive Entertainment Inc.
Most of the buildings and land in/on which such offices, plants and warehouses are located are owned by Sony. - 36 - Table of Contents The status of major property, plant and equipment as of March 31, 2024 is as follows: Facility or Subsidiary Name (Primary Location) Segment Details Carrying Amount (Yen in millions) Number of employees *2 Land (Area (thousand square meters)) Buildings Machinery, equipment and other assets * 1 Right-of-use assets In Japan (Sony Group Corporation *3 ): Headquarters (Minato-ku, Tokyo) Corporate Headquarters facilities 1,311 (19 ) 22,484 16,951 — 1,574 Others *4 Corporate Headquarters facilities 4,840 31,000 3,304 — 535 In Japan (Subsidiaries): Sony Interactive Entertainment Inc.
For example, in the U.S., Sony provides early training and educational support to those who do not have sufficient opportunities and links these activities to the recruitment of diverse individuals.
For example, in the U.S., Sony provides early training and educational support, such as mentorship and internship programs, to those who do not have sufficient educational opportunities, and such initiatives lead to the recruitment of diverse individuals.
Going forward, Sony aims to continue to promote initiatives that lead to greater employee empathy with the Purpose and higher employee engagement, thereby aiming to realize the sustainable growth of Sony.
Going forward, Sony aims to continue to promote initiatives that lead to greater employee empathy with the Purpose and higher employee engagement, thereby aiming to realize the sustainable growth of Sony. Sony aims to be an organization where diverse personalities, opinions, views and values coexist.
In 2018, Sony established and implemented the “Sony Group Ethics Guidelines,” as described above, as Sony has expanded its AI development and usage. In December 2019 Sony established the Sony Group AI Ethics Committee, and in 2021 the AI Ethics Office was established within Sony Group Corporation to provide subject matter expertise on AI ethics to all Business Units.
In December 2019, Sony established the “Sony Group AI Ethics Committee,” and in 2021 the AI Ethics Office was established within Sony Group Corporation to provide subject matter expertise on AI ethics to all Business Units.
In October 2015, the video and sound business was split out and began operations as Sony Video & Sound Products Inc. (“SVS”). In April 2016, the imaging and sensing solutions business was split out and began operations as Sony Semiconductor Solutions Corporation (“SSS”).
In October 2015, the video and sound business was split out and began operations as Sony Video & Sound Products Inc. (“SVS”).
Some of the competitors in the life insurance and non-life insurance businesses have advantages over Sony including: • greater financial resources and financial strength ratings; • greater brand awareness; • more extensive marketing and sales networks, including through tie-ups with other types of financial institutions; • more competitive pricing; • larger customer bases; and • a wider range of products and services.
Sony Assurance competes against insurers that sell their policies through sales agents as well as insurers that, like Sony Assurance, primarily sell their policies through direct marketing via the internet and via telephone. - 26 - Table of Contents Some of the competitors in the life insurance and non-life insurance businesses have advantages over Sony including: • greater financial resources and financial strength ratings; • greater brand awareness; • more extensive marketing and sales networks, including through tie-ups with other types of financial institutions; • more competitive pricing; • larger customer bases; and • a wider range of products and services.
Additionally, the Sustainability Department promotes the group-wide sustainability initiatives by formulating relevant Group policies on identified sustainability issues, including a global environmental plan, “Road to Zero,” and communicating across the Sony Group by collaborating with the Senior Executives in charge of Sony’s headquarters functions and the Relevant Divisions. - 28 - Table of Contents The Business Units consider sustainability issues and opportunities for their respective businesses, and, with unique perspectives, implement sustainability-related initiatives that align with their respective business characteristics.
Additionally, the Sustainability Department promotes the group-wide sustainability initiatives by formulating relevant Group policies on identified sustainability issues, including a global environmental plan, “Road to Zero,” and communicating across the Sony Group by collaborating with the Senior Executives in charge of Sony’s headquarters functions and the Relevant Divisions.
In December 2002, Aiwa was merged into Sony Group Corporation. In June 2003, Sony Group Corporation adopted the “Company with Three Committees” corporate governance system in line with the revised Japanese Commercial Code then effective. (Refer to “Board Practices” in “Item 6. Directors, Senior Management and Employees. ”) In April 2004, Sony Group Corporation established Sony Financial Holdings, Inc.
In December 2002, Aiwa was merged into Sony Group Corporation. - 18 - Table of Contents In June 2003, Sony Group Corporation adopted the “Company with Three Committees” corporate governance system in line with the revised Japanese Commercial Code then effective. (Refer to “Board Practices” in “Item 6.
Name of company Country of incorporation/residence (As of March 31, 2023) Percentage owned Sony Interactive Entertainment Inc. Japan 100.0 Sony Music Entertainment (Japan) Inc.
Name of company Country of incorporation/residence (As of March 31, 2024) Percentage owned Sony Interactive Entertainment Inc. Japan 100.0 Sony Music Entertainment (Japan) Inc. Japan 100.0 Sony Corporation Japan 100.0 Sony Global Manufacturing & Operations Corporation Japan 100.0 Sony Network Communications Inc. Japan 100.0 Sony Marketing Inc.
In addition, Sony Group Corporation and its major subsidiaries in Japan have set targets for increasing both the ratio of women to men in management positions and the ratio of male employees taking childcare leave. - 33 - Table of Contents (iv) Promoting greater opportunities for LGBTQ+ Sony is working to ensure internal infrastructure inclusive of diverse employees and aiming to provide LGBTQ+ employees globally with working environments in which they can feel comfortable being themselves, while acknowledging various national and regional considerations and circumstances.
Additionally, Sony Group Corporation and its major subsidiaries in Japan have set targets to increase the ratio of women in management positions and the ratio of male employees taking childcare leave. • Promoting greater opportunities for LGBTQ+ employees Sony is enhancing its internal infrastructure to support diverse employees and aims to provide LGBTQ+ employees worldwide with inclusive working environments in which they can feel comfortable being themselves, while respecting national and regional contexts.
After identifying potential human rights risks that are highly relevant to Sony’s business activities, the assessments further identified three areas as priority areas for enhancing initiatives throughout the Sony Group: responsible supply chains, respect for DE&I and responsible development and use of technologies.
After identifying potential human rights risks by considering the characteristics of each business operation and the value chains important to each business, the assessments further identified three areas as priority areas for enhancing initiatives throughout the Sony Group: responsible supply chains, respect for diversity and responsible development and use of technologies.
Furthermore, through the “Sony Cross-Mentoring Program,” Sony aims to create strategic connections between the current management team and future key employees in each business segment, to facilitate passing on the current leadership team’s wealth of experience to the next generation and to develop new group synergies and talented individuals.
Furthermore, through the “Sony Cross-Mentoring Program,” Sony aims to create strategic connections between management teams from different businesses and the next generation of leaders, to facilitate passing on the wealth of management experience and to develop talented individuals and new group synergies.
The Lifeplanner ® channel is characterized by recruitment of high-caliber sales professionals from industries outside the life insurance industry, quality improvement through education and training, performance-linked compensation and high productivity. Lifeplanner ® sales specialists offer custom-made packages. Most of the agents in the independent agent channel are corporate and non-exclusive agents, primarily shop-style agents.
Sony Life maintains an extensive service network which mainly consists of the Lifeplanner channel and the independent agent channel in Japan. The Lifeplanner channel is characterized by recruitment of high-caliber sales professionals from industries outside the life insurance industry, quality improvement through education and training, performance-linked compensation and high productivity. Lifeplanner sales specialists offer custom-made packages.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

127 edited+111 added−82 removed66 unchanged
Biggest changeThe “consolidated” column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities. - 47 - Table of Contents Condensed Statements of Financial Position Yen in millions Financial Services Sony without Financial Services Consolidated March 31, 2022 March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022 March 31, 2023 ASSETS Current assets: Cash and cash equivalents *1 ¥ 889,140 ¥ 756,493 ¥ 1,160,496 ¥ 724,407 ¥ 2,049,636 ¥ 1,480,900 Investments and advances in the Financial Services segment *2 360,673 328,357 — — 360,673 328,357 Trade and other receivables, and contract assets 169,929 134,404 1,478,620 1,668,257 1,628,521 1,777,939 Inventories *3 — — 874,007 1,468,042 874,007 1,468,042 Other financial assets 81,174 47,044 68,124 63,906 149,301 110,950 Other current assets 72,441 63,025 450,953 562,442 473,070 610,330 Total current assets 1,573,357 1,329,323 4,032,200 4,487,054 5,535,208 5,776,518 Non-current assets: Investments accounted for using the equity method — — 268,513 325,220 268,513 325,220 Investments and advances in the Financial Services segment *2 18,445,088 18,445,728 — — 18,445,088 18,445,728 Investments in Financial Services, at cost — — 550,483 550,483 — — Property, plant and equipment 18,010 15,316 1,095,241 1,329,219 1,113,213 1,344,864 Right-of-use assets 73,774 84,023 339,658 395,210 413,430 478,063 Goodwill and intangible assets, including content assets *4 72,578 78,197 2,672,466 3,322,639 2,745,044 3,400,836 Deferred insurance acquisition costs 676,526 730,864 — — 676,526 730,864 Deferred tax assets — — 332,330 431,533 298,589 384,839 Other financial assets 37,037 46,941 663,233 789,470 696,306 832,344 Other non-current assets 77,657 75,143 284,834 319,306 289,050 321,946 Total non-current assets 19,400,670 19,476,212 6,206,758 7,463,080 24,945,759 26,264,704 Total assets ¥ 20,974,027 ¥ 20,805,535 ¥ 10,238,958 ¥ 11,950,134 ¥ 30,480,967 ¥ 32,041,222 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings ¥ 1,964,776 ¥ 1,891,856 ¥ 183,187 ¥ 211,020 ¥ 2,147,962 ¥ 2,102,876 Trade and other payables 118,921 77,595 1,744,011 1,812,670 1,843,242 1,865,993 Deposits from customers in the banking business 2,886,361 3,163,237 — — 2,886,361 3,163,237 Income taxes payables 4,444 13,370 101,648 139,330 106,092 152,700 Participation and residual liabilities in the Pictures segment — — 190,162 230,223 190,162 230,223 Other financial liabilities 68,793 43,128 29,050 30,444 97,843 73,572 Other current liabilities 242,937 222,039 1,296,205 1,513,882 1,488,488 1,720,335 Total current liabilities 5,286,232 5,411,225 3,544,263 3,937,569 8,760,150 9,308,936 Non-current liabilities: Long-term debt 470,498 663,353 733,148 1,104,344 1,203,646 1,767,696 Defined benefit liabilities 37,167 37,183 217,381 198,938 254,548 236,121 Deferred tax liabilities 634,576 304,838 110,715 112,938 696,492 356,324 Future insurance policy benefits and other 7,039,034 7,264,421 — — 7,039,034 7,264,421 Policyholders’ account in the life insurance business 4,791,295 5,148,579 — — 4,791,295 5,148,579 Participation and residual liabilities in the Pictures segment — — 220,113 192,952 220,113 192,952 Other financial liabilities 128,208 153,724 86,391 199,327 211,959 350,278 Other non-current liabilities 5,864 7,225 121,558 142,096 106,481 127,593 Total non-current liabilities 13,106,642 13,579,323 1,489,306 1,950,595 14,523,568 15,443,964 Total liabilities 18,392,874 18,990,548 5,033,569 5,888,164 23,283,718 24,752,900 Equity: Stockholders’ equity of Financial Services 2,577,705 1,811,167 — — — — Stockholders’ equity of Sony without Financial Services — — 5,156,059 6,007,177 — — Sony Group Corporation’s stockholders’ equity — — — — 7,144,471 7,229,709 Noncontrolling interests 3,448 3,820 49,330 54,793 52,778 58,613 Total equity 2,581,153 1,814,987 5,205,389 6,061,970 7,197,249 7,288,322 Total liabilities and equity ¥ 20,974,027 ¥ 20,805,535 ¥ 10,238,958 ¥ 11,950,134 ¥ 30,480,967 ¥ 32,041,222 *1 Refer to “Cash Flows” below for details regarding the year-on-year decrease in Cash and cash equivalents as of March 31, 2023 in all segments excluding the Financial Services segment. *2 Refer to Note 5 of the consolidated financial statements for the fluctuations of Investments and advances in the Financial Services segment as of March 31, 2022 and March 31, 2023, respectively. *3 Inventories as of March 31, 2023 in all segments excluding the Financial Services segment increased year-on-year due to an increase in inventories mainly in the G&NS segment. *4 Goodwill and intangible assets, including content assets as of March 31, 2023 in all segments excluding the Financial Services segment increased year-on-year mainly due to the acquisition of the shares of Bungie and an increase in film costs. - 48 - Table of Contents Cash Flows Operating Activities: During the current fiscal year ended March 31, 2023, there was a net cash inflow of 314.7 billion yen from operating activities, a decrease of 919.0 billion yen year-on-year.
Biggest changeThe “consolidated” column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities. - 52 - Table of Contents Condensed Statements of Financial Position Yen in millions Financial Services Sony without Financial Services Consolidated April 1, 2022 Restated March 31, 2023 Restated March 31, 2024 April 1, 2022 Restated March 31, 2023 Restated March 31, 2024 April 1, 2022 Restated March 31, 2023 Restated March 31, 2024 ASSETS Current assets: Cash and cash equivalents *1 ¥ 889,140 ¥ 756,493 ¥ 913,815 ¥ 1,160,496 ¥ 724,407 ¥ 993,298 ¥ 2,049,636 ¥ 1,480,900 ¥ 1,907,113 Investments and advances in the Financial Services segment *2 360,681 328,358 398,153 — — — 360,681 328,358 398,153 Trade and other receivables, and contract assets *3 163,037 127,413 127,016 1,478,620 1,668,257 2,033,170 1,621,629 1,770,948 2,158,196 Inventories — — — 874,007 1,468,042 1,518,644 874,007 1,468,042 1,518,644 Other financial assets 81,174 47,044 57,254 68,124 63,906 68,111 149,301 110,950 125,365 Other current assets 27,893 16,029 50,487 450,953 562,442 625,539 428,522 563,334 669,335 Total current assets 1,521,925 1,275,337 1,546,725 4,032,200 4,487,054 5,238,762 5,483,776 5,722,532 6,776,806 Non-current assets: Investments accounted for using the equity method — — 4,905 268,513 325,220 418,839 268,513 325,220 423,744 Investments and advances in the Financial Services segment *2 18,251,612 18,237,761 18,939,794 — — — 18,251,612 18,237,761 18,939,794 Investments in Financial Services, at cost — — — 550,483 550,483 550,483 — — — Property, plant and equipment 18,010 15,316 14,162 1,095,241 1,329,219 1,508,151 1,113,213 1,344,864 1,522,640 Right-of-use assets 73,774 84,023 76,288 339,658 395,210 428,224 413,430 478,063 503,395 Goodwill and intangible assets, including content assets *4 72,578 78,197 77,323 2,672,466 3,322,639 3,953,492 2,745,044 3,400,836 4,030,815 Deferred tax assets 2,335 2,687 — 332,330 431,533 520,613 300,924 393,107 499,550 Other financial assets 37,037 46,941 52,882 663,233 789,470 848,599 696,306 832,344 897,341 Other non-current assets 167,744 172,565 165,049 284,834 319,306 421,258 379,137 419,368 513,405 Total non-current assets 18,623,090 18,637,490 19,330,403 6,206,758 7,463,080 8,649,659 24,168,179 25,431,563 27,330,684 Total assets ¥ 20,145,015 ¥ 19,912,827 ¥ 20,877,128 ¥ 10,238,958 ¥ 11,950,134 ¥ 13,888,421 ¥ 29,651,955 ¥ 31,154,095 ¥ 34,107,490 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings ¥ 1,964,776 ¥ 1,891,856 ¥ 1,802,337 ¥ 183,187 ¥ 211,020 ¥ 227,979 ¥ 2,147,962 ¥ 2,102,876 ¥ 2,030,316 Trade and other payables 119,017 77,703 61,153 1,744,011 1,812,670 2,005,112 1,843,338 1,866,101 2,064,905 Deposits from customers in the banking business 2,886,361 3,163,237 3,670,567 — — — 2,886,361 3,163,237 3,670,567 Income taxes payables 3,789 15,213 10,050 101,648 139,330 142,024 105,437 154,543 152,074 Participation and residual liabilities in the Pictures segment — — — 190,162 230,223 251,743 190,162 230,223 251,743 Other financial liabilities 98,029 77,605 77,523 29,050 30,444 38,522 127,079 108,049 116,044 Other current liabilities 218,865 194,174 209,555 1,297,115 1,514,792 1,704,158 1,465,326 1,693,380 1,906,396 Total current liabilities 5,290,837 5,419,788 5,831,185 3,545,173 3,938,479 4,369,538 8,765,665 9,318,409 10,192,045 Non-current liabilities: Long-term debt 470,498 663,353 703,106 733,148 1,104,344 1,355,011 1,203,646 1,767,696 2,058,117 Defined benefit liabilities 37,167 37,183 39,284 217,381 198,938 208,299 254,548 236,121 247,583 Deferred tax liabilities 58,666 60,554 36,368 110,715 112,938 165,877 120,582 117,621 166,424 Insurance contract liabilities 13,042,875 12,364,973 12,931,995 — — — 13,042,875 12,364,973 12,931,995 Participation and residual liabilities in the Pictures segment — — — 220,113 192,952 206,081 220,113 192,952 206,081 Other financial liabilities 147,712 175,026 214,414 86,391 199,327 175,263 231,463 371,580 386,761 Other non-current liabilities 5,864 7,225 7,607 121,558 142,096 176,767 106,481 127,593 162,379 Total non-current liabilities 13,762,782 13,308,314 13,932,774 1,489,306 1,950,595 2,287,298 15,179,708 15,178,536 16,159,340 Total liabilities 19,053,619 18,728,102 19,763,959 5,034,479 5,889,074 6,656,836 23,945,373 24,496,945 26,351,385 Equity: Stockholders’ equity of Financial Services 1,087,948 1,180,905 1,113,169 — — — — — — Stockholders’ equity of Sony without Financial Services — — — 5,155,149 6,006,267 7,062,657 — — — Sony Group Corporation’s stockholders’ equity — — — — — — 5,653,804 6,598,537 7,587,177 Noncontrolling interests 3,448 3,820 — 49,330 54,793 168,928 52,778 58,613 168,928 Total equity 1,091,396 1,184,725 1,113,169 5,204,479 6,061,060 7,231,585 5,706,582 6,657,150 7,756,105 Total liabilities and equity ¥ 20,145,015 ¥ 19,912,827 ¥ 20,877,128 ¥ 10,238,958 ¥ 11,950,134 ¥ 13,888,421 ¥ 29,651,955 ¥ 31,154,095 ¥ 34,107,490 *1 Refer to “Cash Flows” below for details regarding the factors affecting Cash and cash equivalents as of March 31, 2024 in all segments excluding the Financial Services segment. - 53 - Table of Contents *2 Refer to Note 5 of the consolidated financial statements for the fluctuations of Investments and advances in the Financial Services segment as of March 31, 2023 and March 31, 2024, respectively. *3 Trade and other receivables, and contract assets as of March 31, 2024 in all segments excluding the Financial Services segment increased year-on-year due to increases in trade receivables mainly in the G&NS, Music, Pictures and I&SS segments. *4 Goodwill and intangible assets, including content assets as of March 31, 2024 in all segments excluding the Financial Services segment increased year-on-year mainly due to the impact of foreign exchange rate fluctuations and an increase in content assets in the Music segment.
Critical Accounting Estimates The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Estimates The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
A hypothetical one percentage point increase in the discount rate, holding all other assumptions constant, would not have resulted in an impairment. • The growth rates applied to the terminal values for the CGUs within the G&NS, ET&S, I&SS and Financial Services segments ranged from approximately 1.0% to 1.5%.
A hypothetical one percentage point increase in the discount rate, holding all other assumptions constant, would not have resulted in a significant impairment. • The growth rates applied to the terminal values for the CGUs within the G&NS, ET&S, I&SS and Financial Services segments ranged from approximately 1.0% to 1.5%.
There were no amounts outstanding under the CP programs as of March 31, 2023. If disruption and volatility occur in financial and capital markets and Sony becomes unable to raise sufficient funds from these sources, Sony may also draw down funds from contractually committed lines of credit from various financial institutions.
There were no amounts outstanding under the CP programs as of March 31, 2024. If disruption and volatility occur in financial and capital markets and Sony becomes unable to raise sufficient funds from these sources, Sony may also draw down funds from contractually committed lines of credit from various financial institutions.
The I&SS segment enters into its own foreign exchange hedging transactions, and the impact of those transactions is included in the impact of foreign exchange rate fluctuations on sales and operating income (loss) for that segment. This information is not a substitute for Sony’s consolidated financial statements measured in accordance with IFRS.
The I&SS segment enters into its own foreign exchange hedging transactions, and the impact of those transactions is included in the impact of foreign exchange rate fluctuations on sales and operating income (loss) for that segment. This information is not a substitute for Sony’s consolidated financial statements measured in accordance with IFRS Accounting Standards.
These presentations are not in accordance with IFRS, which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
These presentations are not in accordance with IFRS Accounting Standards, which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
For all CGUs or groups of CGUs with goodwill, the recoverable amount exceeded the carrying amount, and therefore no impairment existed in the fiscal year ended March 31, 2023. Also, the recoverable amount of each CGU or group of CGUs with significant goodwill exceeded their respective carrying values by at least 10.0%.
For all CGUs or groups of CGUs with goodwill, the recoverable amount exceeded the carrying amount, and therefore no impairment existed in the fiscal year ended March 31, 2024. Also, the recoverable amount of each CGU or group of CGUs with significant goodwill exceeded their respective carrying values by at least 10.0%.
Sony Life, Sony Assurance and Sony Bank maintain a sufficient cash balance and secure sufficient means to meet their obligations while abiding by laws and regulations such as the Insurance Business Act or the Banking Act of Japan, and restrictions imposed by the FSA and other regulatory authorities as well as establishing and operating under company guidelines that comply with these regulations.
Sony Life, Sony Assurance and Sony Bank maintain a sufficient cash balance and secure sufficient means to meet their obligations while abiding by laws and regulations such as the Insurance Business Act or the - 56 - Table of Contents Banking Act of Japan, and restrictions imposed by the FSA and other regulatory authorities as well as establishing and operating under company guidelines that comply with these regulations.
Sony has responded swiftly to changes in the business environment and worked to strengthen the profit structure of each business, while continuing to prioritize management with a long-term view, with the goal of enhancing the corporate value of the entire Sony Group. On May 18, 2023, Sony held its Corporate Strategy Meeting for the fiscal year ending March 31, 2024.
Sony has responded swiftly to changes in the business environment and worked to strengthen the profit structure of each business, while continuing to prioritize management with a long-term view, with the goal of enhancing the corporate value of the entire Sony Group. On May 23, 2024, Sony held its Corporate Strategy Meeting for the fiscal year ending March 31, 2025.
A one yen appreciation against the euro was estimated to decrease sales in these segments by approximately 11.1 billion yen, with a corresponding decrease in operating income of approximately 6.6 billion yen. For more details, refer to “Risk Factors” in “Item 3.
A one yen appreciation against the euro was estimated to decrease sales in these segments by approximately 11.9 billion yen, with a corresponding decrease in operating income of approximately 7.1 billion yen. For more details, refer to “Risk Factors” in “Item 3.
The growth rates beyond the mid-range plan period for the CGUs in the Music segment ranged from 1.0% to 3.0%, and in the Pictures segment ranged from (5.0%) to 21.0%.
The growth rates beyond the mid-range plan period for the CGUs in the Music segment ranged from 1.0% to 3.0%, and in the Pictures segment ranged from (5.0%) to 17.0%.
Operating income for the current fiscal year included the impact of litigation settlements, net of expenses, of 5.7 billion yen received in relation to lawsuits for Recorded Music and Music Publishing and the recovery of 22.1 billion yen of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the previous fiscal year.
Operating income for the previous fiscal year included the impact of litigation settlements, net of expenses, of 5.7 billion yen received in relation to lawsuits for Recorded Music and Music Publishing and the recovery of 22.1 billion yen of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the fiscal year ended March 31, 2022.
In this environment, Sony plans to conduct its business based on the direction of establishing a business structure with two axes: the “profit axis business area,” which aims to maintain and increase profitability, and the “growth axis business area,” which aims to realize growth through the creation and expansion of new businesses.
In this environment, Sony is conducting its business based on the direction of establishing its business structure with two axes: the “profit axis business area,” which aims to maintain and increase profitability, and the “growth axis business area,” which aims to realize growth through the creation and expansion of new businesses.
Such estimate of a film’s ultimate - 59 - Table of Contents revenue is important for the measurement of film costs and participation and residual liabilities in the Pictures segment.
Such estimate of a film’s ultimate revenue is important for the measurement of film costs and participation and residual liabilities in the Pictures segment.
Sony Group Corporation, SGTS and Sony Capital Corporation (“SCC”), a finance subsidiary in the U.S., maintain CP programs with access to the Japanese, U.S. and European CP markets. The borrowing limits under these CP programs, translated into yen, were 1,166.3 billion yen in total for Sony Group Corporation, SGTS and SCC as of March 31, 2023.
Sony Group Corporation, SGTS and Sony Capital Corporation (“SCC”), a finance subsidiary in the U.S., maintain CP programs with access to the Japanese, U.S. and European CP markets. The borrowing limits under these CP programs, translated into yen, were 1 trillion 257.1 billion yen in total for Sony Group Corporation, SGTS and SCC as of March 31, 2024.
These changes in the global economy, in addition to increased geopolitical risk due to tensions between the U.S. and China, the rise of new technologies such as AI, and responses to global environmental challenges and social division, are causing major changes in the environment surrounding each of Sony’s business segments.
Sony has a wide range of businesses globally. These changes in the global economy, in addition to increased geopolitical risk due to tensions between the U.S. and China, the rise of new technologies such as AI, and responses to global environmental challenges and social division, are causing major changes in the environment surrounding each of Sony’s business segments.
Details of those committed lines of credit are: a 275.0 billion yen committed line of credit contracted with a syndicate of Japanese banks, a 1.7 billion U.S. dollar multi-currency committed line of credit also contracted with a syndicate of Japanese banks and a 1,050 million U.S. dollar multi-currency committed line of credit contracted with a syndicate of foreign banks.
Details of those committed lines of credit are: a 350.0 billion yen committed line of credit contracted with a syndicate of Japanese banks, a 1.7 billion U.S. dollar multi-currency committed line of credit also contracted with a syndicate of Japanese banks and a 1.05 billion U.S. dollar multi-currency committed line of credit contracted with a syndicate of foreign banks.
This is because (i) it represents the sustainable earnings power of a business as it does not include the effects of one-time gains and losses, (ii) it enables management to confirm that all the businesses of the Sony Group, including the Financial Services business, are expanding over the mid- to long-term through cycles of investment and return, and (iii) it is often used to calculate corporate value.
This is because (i) they represent the sustainable earnings power of the business as they do not include the effects of one-time gains and losses, (ii) they enable management to confirm that all the businesses of the Sony Group, including the Financial Services business, are expanding over the mid- to long-term through cycles of investment and return, and (iii) they are often used to calculate corporate value.
In the Pictures segment, sales increased 11% year-on-year to 1 trillion 369.4 billion yen, while sales decreased approximately 8% on a U.S. dollar basis. For a detailed analysis of segment performance, refer to the Music and Pictures segments under “ Operating Performance by Business Segment. ” Sony’s Financial Services segment consolidates the yen-based results of SFGI.
In the Pictures segment, sales increased 9% year-on-year to 1 trillion 493.1 billion yen, while sales increased approximately 2% on a U.S. dollar basis. For a detailed analysis of segment performance, refer to the Music and Pictures segments under “ Operating Performance by Business Segment. ” Sony’s Financial Services segment consolidates the yen-based results of SFGI.
The automotive area has been growing steadily, and Sony will continue to work to build and strengthen relationships with OEMs and platformers with the aim of increasing revenue from automotive sensors.
The image sensor business for automotive has been growing steadily, and Sony will continue to work to build and strengthen relationships with OEMs and platformers with the aim of increasing revenue from automotive sensors.
Regarding the capital allocation plan in the fourth mid-range plan, Sony established a capital expenditure target of 1.5 trillion yen and a strategic investment target of 2 trillion yen or more including share repurchases as it aims to grow its business over the longer-term, beyond the duration of the plan.
Regarding the capital allocation plan in the fourth mid-range plan, Sony Group Corporation established a capital expenditure target of 1.5 trillion yen and a strategic investment target of 2 trillion yen or more including share repurchases, aiming to grow its business over the long term, beyond the duration of the plan.
The net fair value of all the foreign exchange derivative contracts as of March 31, 2022 and 2023 was a liability of 6.4 billion yen and an asset of 1.4 billion yen, respectively. Refer to Note 15 of the consolidated financial statements.
The net fair value of all the foreign exchange derivative contracts as of March 31, 2023 and 2024 was an asset of 1.4 billion yen and 2.9 billion yen, respectively. Refer to Note 15 of the consolidated financial statements.
This decrease was primarily due to a larger year-on-year increase in inventories and content assets as well as a decrease in trade payables compared to an increase in the previous fiscal year, partially offset by a year-on-year increase in income before income taxes after taking into account non-cash adjustments (including depreciation and amortization, including amortization of contract costs, other operating (income) expense, net and (gain) loss on securities, net).
This increase was primarily due to a decrease in inventories compared to an increase in the previous fiscal year and a year-on-year increase in income before income taxes after taking into account non-cash adjustments (including depreciation and amortization, including amortization of contract costs, other operating (income) expense, net and (gain) loss on securities, net).
The ratio of cost of sales to sales deteriorated year-on-year from 69.6% to 71.1%. R&D costs (all R&D costs are included within cost of sales) increased 117.3 billion yen year-on-year to 735.7 billion yen. The ratio of R&D costs to sales was 7.3%, compared to 7.4% in the fiscal year ended March 31, 2022.
The ratio of cost of sales to sales deteriorated year-on-year from 71.1% to 71.8%. R&D costs (all R&D costs are included within cost of sales) increased 7.1 billion yen year-on-year to 742.8 billion yen. The ratio of R&D costs to sales was 6.6%, compared to 7.3% in the fiscal year ended March 31, 2023.
During the fiscal year ended March 31, 2023, Sony estimated that a one yen appreciation against the U.S. dollar would have decreased sales in the G&NS, ET&S and I&SS segments by approximately 29.9 billion yen, with a corresponding decrease in operating income of approximately 0.4 billion yen.
During the fiscal year ended March 31, 2024, Sony estimated that a one yen appreciation against the U.S. dollar would have decreased sales in the G&NS, ET&S and I&SS segments by approximately 30.3 billion yen, with a corresponding increase in operating income of approximately 0.6 billion yen.
Business Environment and Strategy In the fiscal year ended March 31, 2023, in a challenging business environment impacted by disruption in production and logistics due to the intermittent resurgence of COVID-19 in China and a slowdown in the market mainly in Europe and the U.S., the operating performance of the ET&S segment reflected the results of various measures implemented to respond promptly to these conditions, such as thorough supply chain management and reduction of fixed costs, as well as the promotion of a shift to high-value-added products centered on TVs and digital cameras.
Business Environment and Strategy In the fiscal year ended March 31, 2024, in a challenging business environment impacted by a slowdown primarily in the television market mainly in Europe, the U.S. and China, the operating performance of the ET&S segment reflected the results of various measures implemented to respond promptly to these conditions, such as thorough supply chain management and reduction of fixed costs, as well as the continued promotion of a shift to high-value-added products centered on digital cameras and headphones.
Liquidity and Capital Resources The description below covers basic financial policy and figures for Sony’s consolidated operations except for the Financial Services segment and certain subsidiaries, which secure liquidity on their own.
Liquidity and Capital Resources The description below covers basic financial policy and figures for Sony’s consolidated operations except for the Financial Services segment and certain subsidiaries, which secure liquidity on their own. Furthermore, the Financial Services segment is described separately in this section.
A hypothetical one percentage point decrease in the growth rate, holding all other assumptions constant, would not have resulted in an impairment. • The earnings multiple used to calculate the terminal value in the Pictures CGU was 1.5x to 12.0x and the revenue multiple was 1.3x to 1.5x.
A hypothetical one percentage point decrease in the growth rate, holding all other assumptions constant, would not have resulted in a significant impairment. • The earnings multiple used to calculate the terminal value in the Pictures CGUs was 1.5x to 13.5x and the revenue multiple was 1.8x.
Business Environment and Strategy The operating performance of the I&SS segment in the fiscal year ended March 31, 2023 reflected the continued trend toward larger size, higher image quality and higher performance image sensors for mobile products, primarily in high-end smartphones, despite continued weakness in the Chinese smartphone market.
Business Environment and Strategy The operating performance of the I&SS segment in the fiscal year ended March 31, 2024 reflected the continued trend toward larger size, higher image quality and higher performance image sensors for mobile products, primarily in high-end smartphones, despite continued stagnation in the U.S. and Asia smartphone markets.
Sony Bank maintains a necessary level of liquidity for the smooth settlement of transactions by using its cash inflows, - 51 - Table of Contents which come mainly from customers’ deposits in local currency, to offer mortgage loans to individuals and to invest mainly in marketable securities.
Sony Bank maintains a necessary level of liquidity for the smooth settlement of transactions by using its cash inflows, which come mainly from customers’ deposits in local currency, to offer mortgage loans to individuals and to invest mainly in marketable securities. Cash inflows from customers’ deposits in foreign currencies are invested mainly in investment instruments of the same currency.
This is because financial services expenses are recorded separately from cost of sales and SGA expenses in the consolidated financial statements. The calculations of all ratios below that pertain to reportable segments include intersegment transactions. For the fiscal year ended March 31, 2023, cost of sales increased 1 trillion 328.9 billion yen year-on-year to 7 trillion 174.7 billion yen.
This is because financial services expenses are recorded separately from cost of sales and SGA expenses in the consolidated financial statements. The calculations of all ratios below that pertain to reportable segments include intersegment transactions. For the fiscal year ended March 31, 2024, cost of sales increased 914.6 billion yen year-on-year to 8 trillion 89.3 billion yen.
Additionally, new business opportunities in areas such as social media and gaming continue to grow, and Sony intends to further collaborate with various service partners in these new business areas to both expand its earnings base by creating new opportunities for - 40 - Table of Contents the use of music content, and to strengthen its relationships with artists by creating opportunities for artists to increase their own earnings.
Additionally, business opportunities in areas such as social media and gaming continue to grow, and Sony intends to further collaborate with various service partners in these new business areas to both expand its earnings base by creating new opportunities for the use of music content and to strengthen its relationships with artists by providing artists with more creative outlets and reach to new fans.
Business Environment and Strategy As digital streaming continued to expand globally, the operating performance of the Music segment for the fiscal year ended March 31, 2023 reflected an increase in revenues from streaming services resulting from the enhanced discovery and development of artists, including Sony’s past proactive acquisitions such as Alamo Records, Som Livre and AWAL.
Business Environment and Strategy As digital streaming continued to expand globally, the operating performance of the Music segment for the fiscal year ended March 31, 2024 reflected an increase in revenues from streaming services resulting from the enhanced discovery and development of artists, benefitting from Sony’s past proactive acquisitions, and from Sony’s past investments in music catalogs.
A discussion of the significant assumptions, other than the mid-range plan, including a sensitivity analysis with respect to their impact, of the recoverable amount of each CGU or group of CGUs for the impairment analysis for goodwill performed for the fiscal year ended March 31, 2023 is included below: • The post-tax discount rates ranged from 2.6% to 15.0%.
A discussion of the significant assumptions, other than the mid-range plan, including a sensitivity analysis with respect to their impact, of the recoverable amount of each CGU or group of CGUs for the impairment analysis for goodwill performed for the fiscal year ended March 31, 2024 is included below.
Financial Services The Financial Services segment results include SFGI and SFGI’s consolidated subsidiaries such as Sony Life, Sony Assurance, and Sony Bank. The results discussed in the Financial Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.
The results discussed in the Financial Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.
Fiscal year ended March 31 2023 (Yen in billions) Net income attributable to Sony Group Corporation’s stockholders 937.1 Net income attributable to noncontrolling interests 6.5 Income taxes 236.7 Interest expenses, net, recorded in Financial income and Financial expense 4.0 Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense 4.6 Depreciation and amortization expense*** 542.2 Profit and loss amount that Sony deems non-recurring**** (27.8 ) Adjusted EBITDA 1,703.4 *** Depreciation and amortization expense excludes amortization of film costs, broadcasting rights and internally developed game content and master recordings included in Content assets, as well as for deferred insurance acquisition costs. **** The table below shows the details of the profit and loss amount that Sony deems non-recurring for the fiscal year ended March 31, 2023.
(Yen in billions) Fiscal year ended March 31 2023 Restated 2024 Net income attributable to Sony Group Corporation’s stockholders 1,005.3 970.6 Net income attributable to noncontrolling interests 6.5 9.9 Income taxes 262.7 288.2 Interest expenses, net, recorded in Financial income and Financial expense 4.0 3.4 (Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense 4.6 (71.4 ) Depreciation and amortization expense* 542.2 643.1 (Profit) / loss amount that Sony deems non-recurring** (27.8 ) (25.8 ) Adjusted EBITDA 1,797.6 1,818.0 * Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets. ** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the fiscal years ended March 31, 2023 and 2024, respectively.
Sony has a total, translated into yen, of 641.5 billion yen in unused committed lines of credit, as of March 31, 2023.
Sony has a total, translated into yen, of 766.4 billion yen in unused committed lines of credit, as of March 31, 2024.
The critical accounting estimates should be read in conjunction with Note 3 of the consolidated financial statements regarding Sony’s significant accounting policies. Financial instruments Sony recognizes a financial instrument as a financial asset or a financial liability when Sony becomes party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.
The critical accounting estimates should be read in conjunction with Notes 2 and 3 of the consolidated financial statements regarding Sony’s material accounting policies. Financial instruments Sony recognizes a financial instrument as a financial asset or a financial liability when Sony becomes party to the contractual provisions of the instrument.
Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results is specified as being on “a U.S. dollar basis.” For the fiscal year ended March 31, 2023, sales increased 130.5 billion yen, an 11% increase year-on-year (an 8% decrease on a U.S. dollar basis), to 1 trillion 369.4 billion yen.
Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results is specified as being on “a U.S. dollar basis.” For the fiscal year ended March 31, 2024, sales increased 123.6 billion yen, a 9% increase year-on-year (a 2% increase on a U.S. dollar basis), to 1 trillion 493.1 billion yen.
For all segments excluding the Financial Services segment, there was a net cash inflow of 415.5 billion yen, a decrease of 397.8 billion yen year-on-year.
For all segments excluding the Financial Services segment, there was a net cash outflow of 794.2 billion yen, a decrease of 237.8 billion yen year-on-year.
For example, in the fiscal year ending March 31, 2024, Sony aims to continue to expand the Sony Pictures Universe of Marvel Characters through the theatrical release of films such as Spider-Man: Across the Spider-Verse and Kraven the Hunter .
For example, in the fiscal year ending March 31, 2025, Sony aims to continue expanding the Sony Pictures Universe of Marvel Characters through the theatrical release of films such as Venom: The Last Dance and Kraven the Hunter .
These transactions in which Sony has relinquished control of trade receivables are accounted for as sales. Certain trade receivable sales programs also involve structured entities. Refer to Note 28 of the consolidated financial statements.
Off-balance Sheet Transactions Sony has certain off-balance sheet transactions that provide liquidity, capital resources and/or credit risk support. These transactions in which Sony has relinquished control of trade receivables are accounted for as sales. Certain trade receivable sales programs also involve structured entities. Refer to Note 28 of the consolidated financial statements.
Furthermore, the Financial Services segment is described separately in this section. - 50 - Table of Contents Liquidity Management and Market Access An important financial objective of Sony is to maintain the strength of its financial condition, while securing adequate liquidity for business activities.
Liquidity Management and Market Access An important financial objective of Sony is to maintain the strength of its financial condition, while securing adequate liquidity for business activities.
Additionally, by leveraging the diversity of the Sony Group, Sony aims to provide a wide variety of marketing opportunities to its artists going forward.
In addition, by leveraging the diversity of the Sony Group, Sony aims to expand opportunities for the use of its music content and provide a wide variety of marketing opportunities to its artists going forward.
Business Environment and Strategy The operating performance of the Financial Services segment for the fiscal year ended March 31, 2023 reflected conditions in the Japanese economy and bond market. As in the previous fiscal year, the Japanese economy faced headwinds due to the COVID-19 pandemic.
Business Environment and Strategy The operating performance of the Financial Services segment for the fiscal year ended March 31, 2024 reflected conditions in the Japanese economy and bond market. The Japanese economy has made progress in normalizing after the COVID-19 pandemic.
Actual results may differ, or unanticipated events and circumstances may affect such estimates, which could require Sony to record an impairment of an identifiable asset acquired and goodwill, or an increase in the amounts recorded for identifiable liabilities assumed.
Due to the inherent uncertainties involved in making the estimates and assumptions, the consideration transferred could be valued and allocated to the identifiable assets acquired and liabilities assumed differently. - 64 - Table of Contents Actual results may differ, or unanticipated events and circumstances may affect such estimates, which could require Sony to record an impairment of an identifiable asset acquired and goodwill, or an increase in the amounts recorded for identifiable liabilities assumed.
This significant increase in sales was mainly due to the impact of foreign exchange rates and an increase in sales of image sensors for mobile products resulting from an improvement in the product mix, partially offset by a decrease in unit sales. Operating income increased 56.6 billion yen year-on-year to 212.2 billion yen.
This significant increase in sales was mainly due to an increase in sales of image sensors for mobile products resulting from an increase in unit sales as well as an improvement in the product mix, and the impact of foreign exchange rates. Operating income decreased 18.7 billion yen year-on-year to 193.5 billion yen.
This significant increase in sales was mainly due to the impact of foreign exchange rates, an increase in sales of hardware and an increase in sales of first-party titles, partially offset primarily by a decrease in sales of non-first-party titles including add-on content. Operating income decreased 96.1 billion yen year-on-year to 250.0 billion yen.
This significant increase in sales was mainly due to an increase in sales of non-first-party titles, including add-on content, and the impact of foreign exchange rates. Operating income increased 40.2 billion yen year-on-year to 290.2 billion yen.
However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
These presentations are not in accordance with IFRS Accounting Standards, which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
These presentations are not in accordance with IFRS Accounting Standards, which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements.
This result was due to significant increases in operating income in the Financial Services, I&SS and Music segments as well as a significant decrease in the operating loss in Corporate and elimination, substantially offset by significant decreases in operating income in the Pictures and G&NS segments and a decrease in operating income in the ET&S segment.
This decrease was mainly due to a significant decrease in operating income in the Financial Services segment and a decrease in operating income in the I&SS segment, partially offset by increases in operating income in the G&NS and Music segments.
Basic net income per share and diluted net income per share, attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2023 were 758.38 yen and 754.95 yen, respectively, compared with 711.84 yen and 705.16 yen, respectively, for the fiscal year ended March 31, 2022. Refer to Note 26 of the consolidated financial statements.
Basic net income per share and diluted net income per share, attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2024 were 788.29 yen and 785.68 yen, respectively, compared with 813.53 yen and 809.85 yen, respectively, for the fiscal year ended March 31, 2023. Refer to Note 26 of the consolidated financial statements.
Fiscal year ended March 31 Impact of changes in foreign exchange rates 2022 2023 2022 to 2023 (Yen in billions) G&NS Sales 2,739.8 3,644.6 +419.8 Operating income 346.1 250.0 -32.4 ET&S Sales 2,339.2 2,476.0 +237.5 Operating income 212.9 179.5 +9.4 I&SS Sales 1,076.4 1,402.2 +202.7 Operating income 155.6 212.2 +120.9 During the fiscal year ended March 31, 2023, sales for the Music segment increased 24% year-on-year to 1 trillion 380.6 billion yen, while sales increased approximately 8% year-on-year on a constant currency basis.
Fiscal year ended March 31 Impact of changes in foreign exchange rates 2023 2024 2023 to 2024 (Yen in billions) G&NS Sales 3,644.6 4,267.7 +278.9 Operating income 250.0 290.2 +38.6 ET&S Sales 2,476.0 2,453.7 +98.4 Operating income 179.5 187.4 +20.5 I&SS Sales 1,402.2 1,602.7 +99.2 Operating income 212.2 193.5 +62.3 During the fiscal year ended March 31, 2024, sales for the Music segment increased 17% year-on-year to 1 trillion 619.0 billion yen, while sales increased approximately 12% year-on-year on a constant currency basis.
Sony Global Treasury Services Plc (“SGTS”) in the U.K. provides integrated treasury services for Sony Group Corporation, its subsidiaries, and affiliated companies. Sony’s policy is that Sony Group Corporation and all subsidiaries with foreign exchange exposures should enter into commitments with SGTS to hedge their exposures. Sony Group Corporation and most of its subsidiaries utilize SGTS for this purpose.
Sony’s policy is that Sony Group Corporation and all subsidiaries with foreign exchange exposures should enter into commitments with SGTS to hedge their - 51 - Table of Contents exposures. Sony Group Corporation and most of its subsidiaries utilize SGTS for this purpose.
Item 5. Operating and Financial Review and Prospects The following discussion covers the fiscal years ended March 31, 2022 and 2023. A. Operating Results Operating Performance The following discussion covers the fiscal years ended March 31, 2022 and 2023.
Item 5. Operating and Financial Review and Prospects The following discussion covers the fiscal years ended March 31, 2023 and 2024. For the discussion covering the fiscal year ended March 31, 2022, refer to “Item 5.
Operating Income For the fiscal year ended March 31, 2023, operating income was 1 trillion 208.2 billion yen, essentially flat year-on-year.
Income before Income Taxes For the fiscal year ended March 31, 2024, income before income taxes was 1 trillion 268.7 billion yen, essentially flat year-on-year.
This decrease in operating income was partially offset by the impact of the above-mentioned increase in sales of first-party titles as well as a decrease in losses from hardware.
This increase in operating income was mainly due to the impact of the above-mentioned increase in sales of non-first-party titles and the positive impact of foreign exchange rates, partially offset by the impact of an increase in losses from hardware, mainly due to promotions, and the impact of a decrease in sales of first-party titles.
In this environment, Sony aims to achieve continuous growth that outpaces the market by proactively making investments toward strengthening its content IP and its relationships with artists, strengthening services for distributed labels centered around The Orchard, ensuring early contact with emerging artists through channels such as AWAL and strengthening its approach in emerging markets by proactively investing in local talent and collaborating with local companies.
In this environment, Sony aims to achieve continuous growth that outpaces the market by strengthening its content IP and its relationships with artists through both established major labels and independent label distribution and artist service channels such as The Orchard and AWAL, strengthening its approach in emerging markets by proactively investing in local talent and collaborating with local companies, and strategically investing in music catalogs.
This increase in sales was primarily due to the impact of foreign exchange rates as well as an increase in sales of digital cameras resulting from higher unit sales, partially offset by a decrease in sales of televisions resulting from lower unit sales. Operating income decreased 33.5 billion yen year-on-year to 179.5 billion yen.
This result was primarily due to a decrease in sales of televisions resulting from lower unit sales, partially offset by the impact of foreign exchange rates. Operating income increased 7.9 billion yen year-on-year to 187.4 billion yen.
Net Income Attributable to Noncontrolling Interests For the fiscal year ended March 31, 2023, net income attributable to noncontrolling interests of 6.5 billion yen was recorded, an increase of 0.3 billion yen year-on-year.
Refer to Note 25 of the consolidated financial statements. Net Income Attributable to Noncontrolling Interests For the fiscal year ended March 31, 2024, net income attributable to noncontrolling interests of 9.9 billion yen was recorded, an increase of 3.4 billion yen year-on-year.
For the fiscal year ended March 31, 2023, consolidated sales increased 1 trillion 618.3 billion yen (16%) year-on-year to 11 trillion 539.8 billion yen. On a constant currency basis, sales increased approximately 4% year-on-year.
For the fiscal year ended March 31, 2024, consolidated sales increased 2 trillion 46.4 billion yen (19%) year-on-year to 13 trillion 20.8 billion yen. On a constant currency basis, sales increased approximately 13% year-on-year.
In addition, the insights gained in the virtual world can be fed back to the AI to bolster its ability. In this way, sensing, AI, and the virtual world can be integrated to transform Sony into an AI/Data-driven company.
In addition, the insights gained in the virtual world can be fed back to the AI to bolster its ability. In this way, sensing, AI, and the virtual world can be integrated to transform Sony into an AI/Data-driven company. Sony has always been committed to being a force for good by empowering creators to turn their creative sparks into stories.
For all segments excluding the Financial Services segment, there was a 95.5 billion yen net cash inflow, compared to a net cash outflow of 325.8 billion yen in the previous fiscal year. The cash inflow in the current fiscal year was primarily due to the procurement of long-term bank loans and the issuance of straight bonds.
For all segments excluding the Financial Services segment, there was a 197.3 billion yen net cash outflow, compared to a net cash inflow of 95.5 billion yen in the previous fiscal year.
This decrease in operating income was mainly due to the impact of the above-mentioned decrease in sales of televisions, partially offset by the impact of the above-mentioned increase in sales of digital cameras. During the current fiscal year, there was a 9.4 billion yen positive impact from foreign exchange rate fluctuations.
This increase in operating income was primarily due to the positive impact of foreign exchange rates and reductions in operating expenses, partially offset by the impact of the above-mentioned lower unit sales of televisions. During the fiscal year ended March 31, 2024, there was a 20.5 billion yen positive impact from foreign exchange rate fluctuations.
Such derivatives are used primarily to mitigate the effect of foreign - 46 - Table of Contents currency exchange rate fluctuations on cash flows generated or anticipated by Sony’s transactions and accounts receivable and payable denominated in foreign currencies.
Such derivatives are used primarily to mitigate the effect of foreign currency exchange rate fluctuations on cash flows generated or anticipated by Sony’s transactions and accounts receivable and payable denominated in foreign currencies. Sony Global Treasury Services Plc (“SGTS”) in the U.K. provides integrated treasury services for Sony Group Corporation, its subsidiaries, and affiliated companies.
Cash and cash equivalents of all segments excluding the Financial Services segment was 724.4 billion yen as of March 31, 2023, a decrease of 436.1 billion yen compared with the balance as of March 31, 2022.
Cash and cash equivalents of all segments excluding the Financial Services segment was 993.3 billion yen as of March 31, 2024, an increase of 268.9 billion yen compared with the balance as of March 31, 2023.
The Financial Services segment used 23.8 billion yen of net cash in investing activities, essentially flat year-on-year. Financing Activities: Net cash inflow from financing activities during the current fiscal year ended March 31, 2023 was 84.3 billion yen, compared to a net cash outflow of 336.6 billion yen in the previous fiscal year.
Financing Activities: Net cash outflow from financing activities during the fiscal year ended March 31, 2024 was 210.7 billion yen, compared to a net cash inflow of 84.3 billion yen in the previous fiscal year.
Issues Facing Sony and Management’s Response to those Issues In the fiscal year ended March 31, 2023, the global economy continued to be greatly affected by inflation.
Issues Facing Sony and Management’s Response to those Issues In the fiscal year ended March 31, 2024, the global economy continued to be affected by inflation, especially in Europe and the U.S., as well as foreign exchange rate fluctuations associated with inflation.
For further information about Sony’s views regarding utilization of cash flow from operating activities generated within the Sony Group for strategic investments, shareholder returns and as cash on hand, refer to “Issues Facing Sony and Management’s Response to those Issues: Fourth Mid-Range Plan — Financial Targets and their Progress.” Off-balance Sheet Transactions Sony has certain off-balance sheet transactions that provide liquidity, capital resources and/or credit risk support.
For further information about Sony’s views regarding utilization of cash flow from operating activities generated within the Sony Group for strategic investments, shareholder returns and as cash on hand, refer to “ Issues Facing Sony and Management’s Response to those Issues : Financial Targets and Capital Allocation.” in Item 5.D.
In the Financial Services segment, there was a 52.6 billion yen net cash outflow, essentially flat year-on-year. Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents as of March 31, 2023 was 1 trillion 480.9 billion yen.
Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents as of March 31, 2024 was 1 trillion 907.1 billion yen.
Sony announced that it would target total Adjusted EBITDA of 4.3 trillion yen on a consolidated basis for the three fiscal years started on April 1, 2021 and ending on March 31, 2024. Management believes that Adjusted EBITDA is a performance metric suitable for the long-term management that Sony prioritizes.
That indicator, which was the most - 62 - Table of Contents important metric of group performance (“Group KPI”) for the fourth mid-range plan, was Adjusted EBITDA. Sony announced that it would target total Adjusted EBITDA of 4.3 trillion yen on a consolidated basis for the three fiscal years started on April 1, 2021 and ended on March 31, 2024.
Income Taxes During the fiscal year ended March 31, 2023, Sony recorded 236.7 billion yen of income tax expenses. The effective tax rate of 20.1% in the current fiscal year was lower than the effective tax rate of 20.5% in the previous fiscal year.
Income Taxes During the fiscal year ended March 31, 2024, Sony recorded 288.2 billion yen of income tax expense, resulting in an effective tax rate of 22.7%, which was higher than the effective tax rate of 20.6% in the previous fiscal year.
Pictures Key Financial Figures Fiscal year ended March 31 2022 2023 (Yen in millions) Sales to external customers by product category Motion Pictures 518,840 464,043 Television Productions 419,494 536,250 Media Networks 298,065 364,594 Sales to external customers 1,236,399 1,364,887 Intersegment sales 2,512 4,535 Pictures segment total sales 1,238,911 1,369,422 Pictures segment operating income 217,393 119,255 The Pictures segment results are the yen-translated results of SPE, which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.
Additionally, Sony aims to grow its game business by improving fan engagement and accelerating the development of high-quality games. - 42 - Table of Contents Pictures Key Financial Figures Fiscal year ended March 31 2023 2024 (Yen in millions) Sales to external customers by product category Motion Pictures 464,043 542,044 Television Productions 536,250 551,035 Media Networks 364,594 393,638 Sales to external customers 1,364,887 1,486,717 Intersegment sales 4,535 6,333 Pictures segment total sales 1,369,422 1,493,050 Pictures segment operating income 119,255 117,702 The Pictures segment results are the yen-translated results of SPE, which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.
For the fiscal year ended March 31, 2023, sales increased 263.7 billion yen to 1 trillion 380.6 billion yen.
For the fiscal year ended March 31, 2024, sales increased 238.3 billion yen year-on-year to 1 trillion 619.0 billion yen.
Revenue at Sony Life decreased 108.4 billion yen year-on-year to 1 trillion 242.1 billion yen, due to a decrease in net gains on investments in the separate accounts. Operating income increased 73.8 billion yen year-on-year to 223.9 billion yen.
Revenue at Sony Life increased 843.1 billion yen year-on-year to 1 trillion 523.9 billion yen, mainly due to an increase in net gains on investments in the separate accounts related to market fluctuations. Operating income decreased 144.5 billion yen year-on-year to 173.6 billion yen.
This significant improvement was primarily due to a decrease in unrealized losses, mainly on Sony’s shares of Spotify Technology S.A. Income before Income Taxes For the fiscal year ended March 31, 2023, income before income taxes increased 62.8 billion yen year-on-year to 1 trillion 180.3 billion yen.
This significant improvement was primarily due to the recording of unrealized gains mainly on Sony’s shares of Spotify Technology S.A. in the fiscal year ended March 31, 2024, compared to the recording of unrealized losses on such shares in the previous fiscal year.
Financial instruments held by Sony are classified according to the measurement method, and for financial instruments measured at fair value, future fluctuations in fair value may have a significant impact on the consolidated financial statements. - 58 - Table of Contents The assessment of credit losses for debt securities is often subjective in nature and involves certain assumptions and estimates concerning the credit risk ratings, expected operating results, business plans and future cash flows of the issuer of the security.
The assessment of credit losses for debt securities is often subjective in nature and involves certain assumptions and estimates concerning the credit risk ratings, expected operating results, business plans and future cash flows of the issuer of the security.
In terms of strategic investment, since Sony decided to increase working capital and capital expenditures, and in consideration of the current M&A market environment, Sony reduced the amount from the initial plan of 2 trillion yen to 1.8 trillion yen. * Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense — Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs, broadcasting rights and internally developed game content and master recordings included in Content assets as well as for deferred insurance acquisition costs — the profit and loss amount that Sony deems non-recurring****.
Adjusted OIBDA (Operating Income Before Depreciation and Amortization) is calculated by the following formula: Adjusted OIBDA = Operating income + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by the following formula: Adjusted EBITDA = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense - Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring - 48 - Table of Contents The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS Accounting Standards for the fiscal years ended March 31, 2023 and 2024, respectively.
Game & Network Services (G&NS) Key Financial Figures Fiscal year ended March 31 2022 2023 (Yen in millions) Sales to external customers by product category Digital Software and Add-on Content 1,424,459 1,523,045 Network Services 409,355 464,676 Hardware & Others 840,542 1,550,812 Sales to external customers 2,674,356 3,538,533 Intersegment sales 65,407 106,065 G&NS segment total sales 2,739,763 3,644,598 G&NS segment operating income 346,089 250,006 (Units in millions) Major product unit sales PS5 ™ hardware 11.5 19.1 For the fiscal year ended March 31, 2023, sales increased 904.8 billion yen year-on-year to 3 trillion 644.6 billion yen.
Refer to Note 4 of the consolidated financial statements. - 40 - Table of Contents Game & Network Services (G&NS) Key Financial Figures Fiscal year ended March 31 2023 2024 (Yen in millions) Sales to external customers by product category Digital Software and Add-on Content 1,523,045 1,934,586 Network Services 464,676 545,537 Hardware & Others 1,550,812 1,692,871 Sales to external customers 3,538,533 4,172,994 Intersegment sales 106,065 94,740 G&NS segment total sales 3,644,598 4,267,734 G&NS segment operating income 250,006 290,184 For the fiscal year ended March 31, 2024, sales increased 623.1 billion yen year-on-year to 4 trillion 267.7 billion yen.
In order to continue managing Sony with a long-term view, Sony’s management established a three-year cumulative key performance indicator. That indicator, which is the most important metric of group performance for the fourth mid-range plan (“Group KPI”), is Adjusted EBITDA*.
The details are as follows: Financial Targets and Capital Allocation Mid-Range Plan — Financial Targets and Results> In the fourth mid-range plan, Sony’s management established a three-year cumulative key performance indicator in order to continue managing Sony with a long-term view.

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Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest change(2) Amounts of remuneration for Directors and Corporate Executive Officers on an individual basis Name Position (*1) Fixed Remuneration (*2) (Yen in millions) Remuneration linked to business results (*2) (*3) (Yen in millions) Phantom restricted stock plan (*2) (Yen in millions) Total (*2) (Yen in millions) Granted number of stock acquisition rights (*4) (Ten thousand shares) Granted number of restricted stock (*5) (Ten thousand shares) Tim Schaaff Former Director (Until June 20, 2023) 27 — 95 (*6) 122 — 0.1 Kenichiro Yoshida Director, Chairman, CEO, and Representative Corporate Executive Officer (*7) (*8) 240 411 — 651 16 8.0 Hiroki Totoki Director, President, COO, CFO, and Representative Corporate Executive Officer (*7) (*8) 80 143 — 223 5 2.5 Shigeki Ishizuka Former Vice Chairman, Former Representative Corporate Executive Officer (Until March 31, 2023) 17 13 221 (*9) 251 — — Toshimoto Mitomo Executive Deputy President, CSO, and Corporate Executive Officer (*8) 52 49 — 101 2 0.6 Shiro Kambe Senior Executive Vice President, and Corporate Executive Officer (*8) 52 51 — 103 2 0.6 Kazushi Ambe Senior Executive Vice President, and Corporate Executive Officer (*8) 52 50 — 102 2 0.6 Hiroaki Kitano Senior Executive Vice President, CTO and Corporate Executive Officer 52 (*10) 49 (*10) — 101 (*10) 2 1.0 *1 This chart shows remuneration for Directors and Corporate Executive Officers who received, or who became likely to receive, total remuneration exceeding 100 million yen from Sony Group Corporation and its subsidiaries during the fiscal year ended March 31, 2023.
Biggest change(1) Total amounts of remuneration for Directors and Corporate Executive Officers and the number thereof *1 Fixed remuneration Remuneration linked to business results Stock acquisition rights (*6) Restricted stock (*9) Phantom Restricted Stock Plan (*10) Number of persons Amount (Yen in millions) Number of persons Amount (Yen in millions) Number of persons Amount (Yen in millions) Number of persons Amount (Yen in millions) Number of persons Amount (Yen in millions) Directors 10 205 — — — — 10 96 — — (*2) (*3) (*4) (*7) (*3) (*11) (Outside Directors) (9) (198) (—) (—) (—) (—) (9) (64) (—) (—) Corporate Executive Officers 6 613 6 916 8 743 8 1,602 — — (*5) (*8) (*8) Total 16 817 6 916 8 743 18 1,698 — — *1 Due to rounding, individual sums may not total 100%. *2 The number of persons does not include two Directors who concurrently serve as Corporate Executive Officers, because the Corporation does not pay any additional remuneration for services as a Director to Directors who concurrently serve as Corporate Executive Officers. *3 The number of persons includes two Directors who resigned on the day of the Ordinary General Meeting of Shareholders held on June 20, 2023. *4 The Corporation does not pay remuneration linked to business results to Directors who do not concurrently serve as Corporate Executive Officers. *5 This is the amount of remuneration linked to business results for the fiscal year ended March 31, 2024 that was paid in November 2023 and June 2024. *6 This is the amount of expenses the Corporation recorded during the fiscal year ended March 31, 2024 applicable to the stock acquisition rights that were granted. *7 The Corporation does not grant stock acquisition rights to Directors who do not concurrently serve as Corporate Executive Officers. *8 The number of persons includes two Corporate Executive Officers who resigned by the end of the fiscal year ended March 31, 2023. *9 This is the amount of expenses the Corporation recorded during the fiscal year ended March 31, 2024 applicable to restricted stock. *10 The Corporation recorded 476 million yen in expenses during the fiscal year ended March 31, 2024 applicable to the phantom restricted stock plan for a Director who resigned on the day of the Ordinary General Meeting of Shareholders held on June 20, 2023 and Corporate Executive Officers. *11 The Corporation does not pay remuneration under the phantom restricted stock plan to Directors who do not concurrently serve as Corporate Executive Officers. - 72 - Table of Contents (2) Amounts of remuneration for Directors and Corporate Executive Officers on an individual basis Name Position (*1) Fixed Remuneration (*2) (Yen in millions) Remuneration linked to business results (*2) (*3) (Yen in millions) Phantom restricted stock plan (*2) (Yen in millions) Total (*2) (Yen in millions) Granted number of stock acquisition rights (*4) (Ten thousand shares) `Granted number of restricted stock (*5) (Ten thousand shares) Kenichiro Yoshida Director (*6), Chairman, CEO, and Representative Corporate Executive Officer (*7) 240 353 — 593 17.0 8.5 Hiroki Totoki Director (*6) , President, COO, CFO, and Representative Corporate Executive Officer (*7) 140 398 — 538 9.0 4.5 Toshimoto Mitomo Executive Deputy President, CSO, and Corporate Executive Officer (*7) 62 49 — 111 2.0 1.0 Hiroaki Kitano Executive Deputy President, CTO, and Corporate Executive Officer 52 (*8) 44 (*8) — 96 (*8) 2.0 1.0 Shiro Kambe Senior Executive Vice President, and Corporate Executive Officer (*7) 52 42 — 94 1.5 0.8 Kazushi Ambe Senior Executive Vice President, and Corporate Executive Officer (*7) 52 41 — 93 1.5 0.8 *1 This chart shows remuneration for Directors and Corporate Executive Officers who received, or who became likely to receive, total remuneration exceeding 100 million yen from the Corporation and its subsidiaries during the fiscal year ended March 31, 2024.
Compensation Under the Financial Instruments and Exchange Act of Japan and related regulations, Sony Group Corporation is required to disclose the total remuneration paid by Sony Group Corporation to Directors and Corporate Executive Officers, as well as remuneration of any Director or Corporate Executive Officer who receives total aggregate annual remuneration exceeding 100 million yen from Sony in a fiscal year, on an individual basis.
Compensation Under the Financial Instruments and Exchange Act of Japan and related regulations, the Corporation is required to disclose the total remuneration paid by the Corporation to Directors and Corporate Executive Officers, as well as remuneration of any Director or Corporate Executive Officer who receives total aggregate annual remuneration exceeding 100 million yen from the Sony Group in a fiscal year, on an individual basis.
Employees As of March 31, 2023, Sony had approximately 113,000 employees, an increase of approximately 4,100 employees from March 31, 2022.
As of March 31, 2023, Sony had approximately 113,000 employees, an increase of approximately 4,100 employees from March 31, 2022.
During the fiscal year ended March 31, 2023, although there was a decrease of employees mainly in the ET&S segment (outside of Japan) due to closure of manufacturing sites in Malaysia, employees of the G&NS, I&SS, and Pictures (outside of Japan) segments increased due to the expansion of these businesses, including through mergers and acquisitions.
During the fiscal year ended March 31, 2023, although there was a decrease of employees mainly in the ET&S segment (outside of Japan) due to closure of manufacturing sites in Malaysia, employees in the G&NS, I&SS, and Pictures (outside of Japan) segments increased due to the expansion of these businesses, including through mergers and acquisitions.
In order to further improve the business results of Sony, the following two elements have been established as the basic policy for the determination of remuneration of Senior Executives. • Attracting and retaining an adequate talent pool possessing the requisite abilities to excel in the global marketplace; and • Providing effective incentives to improve business results on a short-, medium- and long-term basis.
In order to further improve the business results of the Sony Group, the following two elements have been established as the basic policy for the determination of remuneration of Senior Executives. • Attracting and retaining an adequate talent pool possessing the requisite abilities to excel in the global marketplace; and • Providing effective incentives to improve business results on a short-, medium- and long-term basis.
In order to improve this supervisory function over the business operations of Sony, which is a global company, the following two elements have been established as the basic policy for the determination of remuneration of Directors.
In order to improve this supervisory function over the business operations of the Sony Group, which is a global company, the following two elements have been established as the basic policy for the determination of remuneration of Directors.
To operate Sony effectively, Sony Group Corporation continues to approach its corporate governance through two basic precepts: (a) the Board of Directors (the “Board”), a majority of which is comprised of independent outside Directors, focuses on effective oversight of management’s operation of the business and maintains a sound and transparent governance framework by utilizing the Nominating Committee, the Audit Committee and the Compensation Committee; and (b) the Board determines Sony’s fundamental management policies and other material matters and delegates to the Senior Executives (including Corporate Executive Officers), who assume important roles for the management of Sony, decision-making authority to conduct Sony’s business operations broadly in line with their respective responsibilities, as defined by the Board, with a view to promoting timely - 73 - Table of Contents and efficient decision-making within Sony.
To operate Sony effectively, Sony Group Corporation continues to approach its corporate governance through two basic precepts: (a) the Board of Directors (the “Board”), a majority of which is comprised of independent outside Directors, focuses on effective oversight of management’s operation of the business and maintains a sound and transparent governance framework by utilizing the Nominating Committee, the Audit Committee and the Compensation Committee; and (b) the Board determines Sony’s fundamental management policies and other material matters and delegates to the Senior Executives (including Corporate Executive Officers), who assume important roles for the management of Sony, decision-making authority to conduct Sony’s business operations broadly in line with their respective responsibilities, as defined by the Board, with a view to promoting timely and efficient decision-making within Sony.
(b) Basic policy regarding Senior Executive remuneration Senior Executives are key members of management responsible for executing the operations of Sony as a whole, or their respective businesses of Sony.
(b) Basic policy regarding Senior Executive remuneration Senior Executives are key members of management responsible for executing the operations of the Sony Group as a whole, or their respective businesses of the Sony Group.
(present) January 2020 Founder and Chief Product Officer, Vibrant Planet, PBC (present) June 2023 Director, the Corporation (present) William Morrow Responsibility as a Director: Member of the Compensation Committee Date of Birth: July 2, 1959 Number of Years Served as a Director: — Brief Personal History and Principal Business Activities Outside the Corporation: September 1980 Director, Pacific Bell Inc.
(present) January 2020 Founder and Chief Product Officer, Vibrant Planet, PBC (present) June 2023 Director, the Corporation (present) William Morrow Responsibility as a Director: Member of the Compensation Committee Date of Birth: July 2, 1959 Number of Years Served as a Director: 1 year Brief Personal History and Principal Business Activities Outside the Corporation: September 1980 Director, Pacific Bell Inc.
Accordingly, the components of remuneration based on the amounts actually paid will be different from the chart below. *Due to rounding, individual sums may not total 100%. (Reference: Stock-based Compensation) Sony Group Corporation introduced stock acquisition rights, restricted stock and RSUs as forms of stock-based compensation, granted to the Directors and the Senior Executives including Corporate Executive Officers.
Accordingly, the components of remuneration based on the amounts actually paid will be different from the chart below. *Due to rounding, individual sums may not total 100%. (Reference: Stock-based Compensation) The Corporation introduced stock acquisition rights, restricted stock and RSUs as forms of stock-based compensation, granted to the Directors and the Senior Executives including Corporate Executive Officers.
Support for Activities of Directors, the Board and the Committees Sony Group Corporation engages in various activities to enhance the oversight function of the Board over management’s operation of Sony’s business as follows: (1) Outside Director Initiatives The Chairman of the Board, who is an outside Director, leads the Board’s activities and secures the appropriate cooperation, communication and arrangement among outside Directors and Senior Executives.
Support for Activities of Directors, the Board and the Committees Sony Group Corporation engages in various activities to enhance the oversight function of the Board over management’s operation of Sony’s business as follows: (1) Outside Director Initiatives The Chair of the Board, who is an outside Director, leads the Board’s activities and secures the appropriate cooperation, communication and arrangement among outside Directors and Senior Executives.
The actual value, if any, that is realized by a Corporate Executive Officer upon the exercise of any stock acquisition rights will depend on the extent to which the market value of Sony Group Corporation’s common stock (“Common Stock”) exceeds the exercise price of the stock acquisition rights on the date of exercise, and several other restrictions imposed on the exercise of the stock acquisition rights, including the period when a Corporate Executive Officer could exercise the stock acquisition rights.
The actual value, if any, that is realized by a Corporate Executive Officer upon the exercise of any stock acquisition rights will depend on the extent to which the market value of the Corporation’s common stock (“Common Stock”) exceeds the exercise price of the stock acquisition rights on the date of exercise, and several other restrictions imposed on the exercise of the stock acquisition rights, including the period when a Corporate Executive Officer could exercise the stock acquisition rights.
(Please see below Reference: Executive Compensation Package Design to Focus on Long-Term Management.) • The amount of stock-based compensation shall be determined so that the amount is within a certain percentage of the total cash compensation (total of the fixed remuneration and the remuneration linked to business results) and stock-based compensation.
(Please see below Reference: Executive Compensation Package Designed to Focus on Long-Term Management.) • The amount of stock-based compensation shall be determined so that the amount is within a certain percentage of the total cash compensation (total of the fixed remuneration and the remuneration linked to business results) and stock-based compensation.
The Board also conducted Directors’ corporate strategic workshops with management, business site visits by Directors, and meetings with the Chairman and the CEO. All of these activities were aimed at securing better understanding by outside Directors of Sony’s business and management’s challenges and encouraging corporate strategic discussions among Directors.
The Board also conducted Directors’ corporate strategic workshops with management, business site visits by Directors, and meetings with the Chair of the Board and the CEO. All of these activities were aimed at securing better understanding by outside Directors of Sony’s business and management’s challenges and encouraging corporate strategic discussions among Directors.
Outside Director Neil Hunt Outside Director William Morrow Outside Director Under the Companies Act, the term of office of Directors expires at the conclusion of the Ordinary General Meeting of Shareholders held with respect to the last business year ending within one year after their election.
Outside Director Neil Hunt Outside Director William Morrow Outside Director Shingo Konomoto Outside Director Under the Companies Act, the term of office of Directors expires at the conclusion of the Ordinary General Meeting of Shareholders held with respect to the last business year ending within one year after their election.
In addition to these, the Audit Committee held interviews with Senior Executives to receive reports on matters such as the recognition of issues and the status of risk management in the respective areas of responsibility of each business and headquarter function, and engaged in dialogue.
In addition to these, the Audit Committee held interviews with Senior Executives and other officers to receive reports on matters such as the recognition of issues and the status of risk management in the respective areas of responsibility of each business and headquarter function, and engaged in dialogue.
As to the stock-based compensation, the underlying amount is calculated based on the fair value of a stock acquisition right as of the date such stock acquisition right was granted in the fiscal year ended March 31, 2023 and the issue price of the restricted stock when granted.
As to the stock-based compensation, the underlying amount is calculated based on the fair value of a stock acquisition right as of the date such stock acquisition right was granted in the fiscal year ended March 31, 2024 and the issue price of the restricted stock when granted.
During the fiscal year ended March 31, 2023, Sony Group Corporation granted stock acquisition rights, which represent rights to subscribe for shares of Common Stock, to Corporate Executive Officers and employees of Sony Group Corporation as well as directors, officers and employees of its subsidiaries.
During the fiscal year ended March 31, 2024, Sony Group Corporation granted stock acquisition rights, which represent rights to subscribe for shares of Common Stock, to Corporate Executive Officers and employees of Sony Group Corporation as well as directors, officers and employees of its subsidiaries.
Furthermore, the purpose of the stock-based compensations for the Senior Executives including Corporate Executive Officers is to further reinforce management’s alignment with shareholder value, and to incentivize management to improve mid- to long- term performance and increase shareholder value.
Furthermore, the purpose of the stock-based compensation for the Senior Executives including Corporate Executive Officers is to further reinforce management’s alignment with shareholder value, and to incentivize management to improve mid- to long-term performance and increase shareholder value.
(3) Procedure of the Recent Evaluation First, the Board confirmed that the actions proposed to be taken in response to the results of the previous Evaluation were taken, and it discussed and confirmed the proposed procedures for the Evaluation for the fiscal year ended March 31, 2023.
(3) Procedure of the Recent Evaluation First, the Board confirmed that the actions proposed to be taken in response to the results of the previous Evaluation were taken, and it discussed and confirmed the proposed procedures for the Evaluation for the fiscal year ended March 31, 2024.
These determinations were required by and met the requirements of the Companies Act. - 81 - Table of Contents A summary of the principal framework of the internal control and governance framework based on the Board determination above is as follows: (1) Disclosure Control Framework The securities of Sony Group Corporation are listed for trading on exchanges in Japan and the U.S.
These determinations were required by and met the requirements of the Companies Act. A summary of the principal framework of the internal control and governance framework based on the Board determination above is as follows: (1) Disclosure Control Framework The securities of Sony Group Corporation are listed for trading on exchanges in Japan and the U.S.
As for the Senior Executives, each year at the meeting of the Compensation Committee held at the end of the previous fiscal year, in principle, the amount of basic remuneration and the content of compensation for the corresponding fiscal year are determined or supervised.
As for the Senior Executives, each year at the meeting of the Compensation Committee held at the end of the previous fiscal year, in principle, the amount of basic remuneration and the content of compensation for the corresponding fiscal year are determined or reviewed.
In addition, the above weighted-average fair value per share was calculated to recognize compensation expense for the fiscal year ended March 31, 2023 for accounting purposes and should not be regarded as any indication or prediction of Sony with respect to its future stock performance. *5 This indicates the total number of shares of restricted stock granted in the fiscal year ended March 31, 2023 for Directors and Corporate Executive Officers.
In addition, the above weighted-average fair value per share was calculated to recognize compensation expense for the fiscal year ended March 31, 2024 for accounting purposes and should not be regarded as any indication or prediction of the Sony Group with respect to its future stock performance. *5 This indicates the total number of shares of restricted stock granted in the fiscal year ended March 31, 2024 for Corporate Executive Officers.
Sony Group Corporation’s policy on investor relations activities is to aim to disclose accurate information in a timely and fair manner, as well as to endeavor to promote constructive dialogue with shareholders and investors, with a view to maximizing the corporate value by building a relationship of trust with shareholders and investors.
Sony Group Corporation’s policy on investor relations activities is to aim to disclose accurate - 87 - Table of Contents information in a timely and fair manner, as well as to endeavor to promote constructive dialogue with shareholders and investors, with a view to maximizing the corporate value by building a relationship of trust with shareholders and investors.
Board of Directors Kenichiro Yoshida Responsibility as a Director: — Date of Birth: October 20, 1959 Number of Years Served as a Director: 9 years Principal Business Activities Outside the Corporation: Outside Director, M3, Inc.
Board of Directors Kenichiro Yoshida Responsibility as a Director: — Date of Birth: October 20, 1959 Number of Years Served as a Director: 10 years Principal Business Activities Outside the Corporation: Outside Director, M3, Inc.
In addition, Sony grants titles, such as Senior Executive Vice President, Executive Vice President and Senior Vice President, to management team members in accordance with their respective roles and responsibilities. A summary of the governance system adopted by Sony Group Corporation is set forth below.
In addition, Sony grants titles, such as Senior Executive Vice President, Executive Vice President and Senior Vice President, to management team members in accordance with their respective roles and responsibilities. - 79 - Table of Contents A summary of the governance system adopted by Sony Group Corporation is set forth below.
(4) Management Succession Plans The Nominating Committee evaluates the succession plans, and the implementation of such plans, for the CEO and other executives designated by the Nominating Committee and reports the results of its evaluation to the Board, as appropriate. Evaluations are conducted by having the CEO periodically submit draft succession plans to the Nominating Committee, which it reviews.
(4) Management Succession Plans The Nominating Committee evaluates the succession plans, and the implementation of such plans, for the CEO and other executives designated by the Nominating Committee, and reports the results of its evaluation to the Board, as appropriate. - 82 - Table of Contents Evaluations are conducted by having the CEO periodically submit draft succession plans to the Nominating Committee, which it reviews.
During the fiscal year ended March 31, 2022, although there was an increase of - 84 - Table of Contents employees mainly in the I&SS, Music (outside of Japan) and G&NS (outside of Japan) segments, there was a decrease of employees in the ET&S segment (outside of Japan) and All Other (outside of Japan).
During the fiscal year ended March 31, 2022, although there was an increase of employees mainly in the I&SS, Music (outside of Japan) and G&NS (outside of Japan) segments, there was a decrease of employees in the ET&S segment (outside of Japan) and All Other (outside of Japan).
The details of such stock-based compensation, including vesting conditions, recipients and number of grants, are determined or supervised by the Compensation Committee based on research conducted by a third party regarding stock-based compensation of both Japanese and non-Japanese companies.
The details of such stock-based compensation, including vesting conditions, recipients and number of grants, are determined or supervised by the Compensation Committee based on research conducted by a third - 76 - Table of Contents party regarding stock-based compensation of both Japanese and non-Japanese companies.
The specific matters given consideration by the Compensation Committee included the Corporation’s policy regarding the determination of individual remuneration for Directors and Senior Executives, including Corporate Executive Officers, for each fiscal year, and the amount and content of such remuneration.
The specific matters given consideration by the Compensation Committee included the Corporation’s policy regarding the determination of individual remuneration for Directors and Senior Executives, including Corporate - 90 - Table of Contents Executive Officers, for each fiscal year, and the amount and content of such remuneration.
Kraft Jr. Responsibility as a Director: Member of the Audit Committee Director in charge of Information Security Date of Birth: May 12, 1964 Number of Years Served as a Director: 3 years Brief Personal History and Principal Business Activities Outside the Corporation: July 1986 Joined Morgan Stanley Inc. January 2000 Managing Director, Morgan Stanley Inc.
Kraft Jr. Responsibility as a Director: Chair of the Audit Committee Member of the Nominating Committee Director in charge of Information Security Date of Birth: May 12, 1964 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: July 1986 Joined Morgan Stanley Inc. January 2000 Managing Director, Morgan Stanley Inc.
Directors and Senior Management Set forth below are the current members of the Board of Directors and Corporate Executive Officers of Sony Group Corporation (the “Corporation”), their responsibility as a director or officer, date of birth, the number of years they have served as a director or officer, and other principal business activities outside the Corporation as of June 20, 2023.
Directors and Senior Management Set forth below are the current members of the Board of Directors and Corporate Executive Officers of Sony Group Corporation (the “Corporation”), their responsibility as a director or officer, date of birth, the number of years they have served as a director or officer, and other principal business activities outside the Corporation as of June 25, 2024.
In addition, in determining the number of shares or units to be granted, the impact on dilution of the value of the shares of Sony Group Corporation is monitored.
In addition, in determining the number of shares or units to be granted, the impact on dilution of the value of the shares of the Corporation is monitored.
As of the date of this report, all Directors satisfy the qualifications for Directors as set forth below, and all outside Directors satisfy the additional qualifications for outside Directors and are also qualified and designated as Independent Directors under the Securities Listing Regulations of the TSE.
As of the date of this report, all Directors satisfy the qualifications for Directors as set forth - 80 - Table of Contents below, and all outside Directors satisfy the additional qualifications for outside Directors and are also qualified and designated as Independent Directors under the Securities Listing Regulations of the TSE.
To achieve this goal, Sony Group Corporation conducts evaluations of the effectiveness of the Board and of each Committee (the “Evaluation”) at least annually.
To achieve this goal, Sony Group Corporation conducts evaluations of the effectiveness of the Board and of each Committee (the “Evaluation”) annually.
At Board meetings held on May 13, 2009 and April 30, 2015, the Board amended and updated the internal control and governance framework, and at a Board meeting held on April 28, 2023, the Board reaffirmed that such framework was in effect and determined to continue to evaluate and improve such framework going forward, as appropriate.
At Board meetings held on May 13, 2009 and April 30, 2015, the Board amended and updated the internal control and governance framework, and at a Board meeting held on May 14, 2024, the Board reaffirmed that such framework was in effect and determined to continue to evaluate and improve such framework going forward, as appropriate.
“Adjusted EPS” is calculated by using the value excluding the profit and loss amount that Sony deems non-recurring from the value of the net income attributable to Sony Group Corporation’s stockholders. *3 Adjusted EPS result for the fiscal year ended March 31, 2023 is calculated by dividing adjusted net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2023 by diluted weighted average number of shares during the fiscal year.
“Adjusted EPS” is calculated by using the value excluding the profit and loss amount that Sony deems non-recurring from the value of the net income attributable to Sony Group Corporation’s stockholders. - 78 - Table of Contents *3 Adjusted EPS result for the fiscal year ended March 31, 2024 is calculated by dividing adjusted net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2024 by diluted weighted average number of shares during the fiscal year.
Number of Employees by Segment and Region March 31 2021 2022 2023 By segment: G&NS 9,600 10,200 12,700 Music 9,900 10,800 11,100 Pictures 8,000 8,100 9,100 ET&S 43,700 40,200 38,400 I&SS 16,800 18,100 20,300 Financial Services 12,900 13,200 13,500 All Other 2,800 2,300 2,100 Unallocated — Corporate employees 6,000 6,000 5,800 By region: Japan 54,500 55,100 56,400 Outside of Japan 55,200 53,800 56,600 Total 109,700 108,900 113,000 In addition, the average number of employees for the fiscal years ended March 31, 2021, 2022 and 2023 calculated by averaging the total number of employees at the end of each quarter, was approximately 110,700, 109,600 and 112,300 respectively.
Number of Employees by Segment and Region March 31 2022 2023 2024 By segment: G&NS 10,200 12,700 12,700 Music 10,800 11,100 11,300 Pictures 8,100 9,100 9,500 ET&S 40,200 38,400 38,700 I&SS 18,100 20,300 19,700 Financial Services 13,200 13,500 13,600 All Other 2,300 2,100 1,900 Unallocated — Corporate employees 6,000 5,800 5,600 By region: Japan 55,100 56,400 57,200 Outside of Japan 53,800 56,600 55,800 Total 108,900 113,000 113,000 In addition, the average number of employees for the fiscal years ended March 31, 2022, 2023 and 2024, calculated by averaging the total number of employees at the end of each quarter, was approximately 109,600, 112,300 and 113,900, respectively.
Name Meeting Records *1 Attendance Records *1 Wendy Becker 5 Times 5 Times (100%) Yoshihiko Hatanaka *2 5 Times 5 Times (100%) Sakie Akiyama 5 Times 5 Times (100%) *1 The numbers of the Meeting Records and the Attendance Records are those applicable to the fiscal year ended on March 31, 2023. *2 Yoshihiko Hatanaka, who was a member of the Compensation Committee during the fiscal year ended on March 31, 2023, retired as a member of the Compensation Committee on June 20, 2023.
Name Meeting Records *1 Attendance Records *1 Wendy Becker 5 Times 5 Times (100%) Yoshihiko Hatanaka *2 1 Time 1 Time (100%) Sakie Akiyama 5 Times 5 Times (100%) William Morrow *2 4 Times 4 Times (100%) *1 The numbers of the Meeting Records and the Attendance Records are those applicable to the fiscal year ended March 31, 2024. *2 Yoshihiko Hatanaka, who was a member of the Compensation Committee during the fiscal year ended March 31, 2024, retired as a member of the Compensation Committee on June 20, 2023.
February 2017 Board member, Chair of Remuneration Committee, Great Portland Estates plc September 2017 Board member, Logitech International S.A. (present) June 2019 Director, the Corporation (present) September 2019 Chair of the Board, Chair of Nominating Committee, Logitech International S.A.
February 2017 Board member, Chair of Remuneration Committee, Great Portland Estates plc September 2017 Board member, Logitech International S.A. June 2019 Director, the Corporation (present) September 2019 Non-Executive Director, Chairperson of the Board, Chair of Nominating Committee, Logitech International S.A.
The Committee also considered the total number of stock acquisition rights to be issued for the purpose of granting stock options to Corporate Executive Officers, employees of the Corporation, Directors and other officers of the Corporation’s subsidiaries, and other stock-based compensation utilizing shares of the Corporation’s stock.
The Committee also considered the total number of stock acquisition rights to be issued for the purpose of granting stock options to Corporate Executive Officers and employees of the Corporation and directors, other officers and employees of the Corporation’s subsidiaries, and other stock-based compensation utilizing shares of the Corporation’s stock such as restricted stock and restricted stock units.
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation reported in accordance with IFRS to Adjusted EPS for the fiscal year ended March 31, 2023.
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation reported in accordance with IFRS Accounting Standards to Adjusted EPS for the fiscal year ended March 31, 2024.
The Corporate Executive Officer in charge of group risk control shall comprehensively promote and manage the establishment and maintenance of the systems as stated above. Details of Actions Taken by the Board and the Committees (1) Details of Actions Taken by the Board During the fiscal year ended on March 31, 2023, the Board convened 9 times.
The Corporate Executive Officer in charge of group risk control shall comprehensively promote and manage the establishment and maintenance of the systems as stated above. Details of Actions Taken by the Board and the Committees (1) Details of Actions Taken by the Board During the fiscal year ended March 31, 2024, the Board convened 7 times.
Stock-based compensation (restricted stock or restricted stock units) • Restricted stock or restricted stock units (“RSUs”) are granted to further promote shared values between Directors and shareholders and incentivize Directors to develop and maintain a sound and transparent management system. • Any Director to whom restricted stock is granted may not sell or transfer the granted shares during his/her tenure, and in principle, such restriction is to be released when such Director resigns. • In principle, RSUs held by Directors will be vested when he/she resigns, and the Common Stock of the company will then be delivered to the Directors.
Stock-based compensation (restricted stock or RSUs) • Restricted stock or RSUs are granted to further promote shared values between Directors and shareholders and incentivize Directors to develop and maintain a sound and transparent management system. • Any Director to whom restricted stock is granted may not sell or transfer the granted shares during his/her tenure, and in principle, such restriction is to be released when such Director resigns. • In principle, RSUs held by Directors will vest when he/she resigns, and the Common Stock of the Corporation will then be delivered to the Directors upon vesting.
Following discussions and analysis based on the Outside Counsel’s report, the Board re-affirmed that the Board and each Committee were functioning effectively as of April 2023. The Outside Counsel also suggested several possible options for the Board and Committees to further improve their own effectiveness.
Following discussions and analysis based on the Outside Counsel’s report, the Board re-affirmed that the Board and each Committee were functioning effectively as of May 2024. The Outside Counsel also suggested several ideas on possible options for the Board and Committees to further improve their own effectiveness.
The following table shows the portion of those stock acquisition rights which were granted by Sony Group Corporation to Directors and Corporate Executive Officers as of June 2, 2023 and which were outstanding as of the same date.
The following table shows the portion of those stock acquisition rights which were granted by Sony Group Corporation to Directors and Corporate Executive Officers as of June 7, 2024 and which were outstanding as of the same date.
The purpose of the stock-based compensation for the non-executive Directors including outside Directors is to incentivize these Directors to develop and maintain a sound and transparent management system by further promoting shared values between the shareholders and these Directors.
The purpose of the stock-based compensation for the outside Directors is to incentivize the outside Directors to develop and maintain a sound and transparent management system by further promoting shared values between the shareholders and the outside Directors.
(present) June 2021 Board member, Chair of Remuneration Committee, Oxford Nanopore Technologies plc (present) - 63 - Table of Contents Keiko Kishigami Responsibility as a Director: Member of the Audit Committee Date of Birth: January 28, 1957 Number of Years Served as a Director: 3 years Brief Personal History and Principal Business Activities Outside the Corporation: October 1985 Joined Peat Marwick Minato (currently Ernst & Young ShinNihon LLC) August 1989 Registered as Certified Public Accountant (present) December 1997 Partner, Century Audit Corporation (currently Ernst & Young ShinNihon LLC) May 2004 Representative Partner (Senior Partner), Ernst & Young ShinNihon (currently Ernst & Young ShinNihon LLC) September 2018 Board Member, WWF Japan (present) June 2019 Outside Auditor, Okamura Corporation (present) June 2020 Director, the Corporation (present) June 2021 Outside Director, Sumitomo Seika Chemicals Company, Limited (present) March 2023 Outside Auditor, DIC Corporation (present) Joseph A.
Outside Director, Orix Corporation (present) June 2020 Outside Director, Mitsubishi Corporation (present) Keiko Kishigami Responsibility as a Director: Member of the Audit Committee Date of Birth: January 28, 1957 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: October 1985 Joined Peat Marwick Minato (currently Ernst & Young ShinNihon LLC) August 1989 Registered as Certified Public Accountant (present) December 1997 Partner, Century Audit Corporation (currently Ernst & Young ShinNihon LLC) May 2004 Representative Partner (Senior Partner), Ernst & Young ShinNihon (currently Ernst & Young ShinNihon LLC) September 2018 Board Member, WWF Japan (present) June 2019 Outside Auditor, Okamura Corporation (present) June 2020 Director, the Corporation (present) June 2021 Outside Director, Sumitomo Seika Chemicals Company, Limited (present) March 2023 Outside Auditor, DIC Corporation (present) - 68 - Table of Contents Joseph A.
The following table and accompanying footnotes show the information on such matters that Sony Group Corporation has disclosed in its annual Securities Report for the fiscal year ended March 31, 2023 filed on June 20, 2023 with the Director General of the Kanto Local Finance Bureau of the Ministry of Finance in Japan.
The following table and accompanying footnotes show the information on such matters that the Corporation has disclosed in its annual Securities Report for the fiscal year ended March 31, 2024 filed on June 25, 2024 with the Director General of the Kanto Local Finance Bureau of the Ministry of Finance in Japan.
The amount of each component and its percentage of total remuneration shall be at an appropriate level determined in accordance with the basic policy above and based on research conducted by a third party regarding remuneration of directors of both Japanese and non-Japanese companies. - 68 - Table of Contents Type of remuneration Description Fixed remuneration • The amount of fixed remuneration shall be at an appropriate level determined in accordance with the basic policy above and based on research conducted by a third party regarding remuneration of directors of both Japanese and non-Japanese companies.
The amount of each component and its percentage of total remuneration shall be at an appropriate level determined in accordance with the basic policy above and based on research conducted by a third party regarding remuneration of directors of both Japanese and non-Japanese companies.
(All of the allocated stock acquisition rights will be exercisable on and after three years from the allotment date.) • The Senior Executives to whom restricted stock is granted, in principle, may not sell or transfer the granted stock before the third anniversary date of the Ordinary General Meeting of Shareholders of the fiscal year when the subject restricted stock was granted. • In principle, all RSUs held by the Senior Executives will be vested after three years have passed since the date of grant of the RSUs, and the Common Stock of the company will be delivered to the Senior Executives. • As a general policy, remuneration for a Senior Executive who has greater management responsibility and influence over Sony as a whole has a higher proportion of stock-based compensation, which is directly linked to the corporate value.
(All of the allocated stock acquisition rights will be exercisable on and after three years from the allotment date.) • The Senior Executives to whom restricted stock is granted, in principle, may not sell or transfer the granted stock before the third anniversary date of the Ordinary General Meeting of Shareholders of the fiscal year when the subject restricted stock was granted. - 75 - Table of Contents Type of remuneration Description • In principle, all RSUs held by the Senior Executives will vest after three years have passed since the date of grant of the RSUs, and the Common Stock of the Corporation will then be delivered to the Senior Executives upon vesting. • As a general policy, remuneration for a Senior Executive who has greater management responsibility and influence over the Sony Group as a whole has a higher proportion of stock-based compensation, which is directly linked to the corporate value.
Senior Executives (Corporate Executive Officer, Senior Executive Vice President and Executive Vice President) (1) Total number of Senior Executives: 15 (including 6 Corporate Executive Officers) (as of June 20, 2023) (2) Purpose/Authority The primary roles of Senior Executives are to determine and execute Sony’s business activities in accordance with their roles and responsibilities.
Senior Executives (Corporate Executive Officer, Senior Executive Vice President and Executive Vice President) (1) Total number of Senior Executives: 14 (including 6 Corporate Executive Officers) (as of June 25, 2024) (2) Purpose/Authority The primary roles of Senior Executives are to determine and execute Sony’s business activities in accordance with their roles and responsibilities.
Audit Committee Member (Outside Director) (2) Purpose/Authority The primary roles of the Audit Committee are to: (a) monitor the performance of duties by Directors and Corporate Executive Officers and (b) oversee and evaluate the independent auditor.
Chair of the Audit Committee (Outside Director) Keiko Kishigami Audit Committee Member (Outside Director) Shingo Konomoto Audit Committee Member (Outside Director) (2) Purpose/Authority The primary roles of the Audit Committee are to: (a) monitor the performance of duties by Directors and Corporate Executive Officers and (b) oversee and evaluate the independent auditor.
As a result, the ratio of remuneration linked to business results of Corporate Executive Officers for the fiscal year ended March 31, 2023 varied from 155.2% to 178.5% of the Business Results Linked Standard Payment Amount. *1 “Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)” = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense — Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs, broadcasting rights and internally developed game content and master recordings included in Content assets, as well as for deferred insurance acquisition costs — the profit and loss amount that Sony deems non-recurring. *2 “EPS (Earning Per Share)” means net income attributable to Sony Group Corporation’s stockholders per share.
As a result, the ratio of remuneration linked to business results of Corporate Executive Officers for the fiscal year ended March 31, 2024 varied from 130.7% to 284.4% of the Business Results Linked Standard Payment Amount. *1 “Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)” = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense — Gain on revaluation of equity securities, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs, broadcasting rights, as well as for internally developed game content and master recordings included in Content assets — the profit and loss amount that Sony deems non-recurring. *2 “EPS (Earning Per Share)” means net income attributable to Sony Group Corporation’s stockholders per share.
Stock-based compensation (Stock acquisition rights, and restricted stock or restricted stock units) • Stock acquisition rights, and restricted stock or RSUs are granted to incentivize Senior Executives to increase mid- to long-term shareholder value. • The exercise of the stock acquisition rights is, in principle, restricted during a one-year period from the allotment date, and one-third of the total number of exercisable stock acquisition rights will be vested and exercisable each year thereafter.
(Please see below Reference: Clawback Policy.) Stock-based compensation (Stock acquisition rights, and restricted stock or restricted stock units) • Stock acquisition rights, and restricted stock or RSUs are granted to incentivize Senior Executives to increase mid- to long-term shareholder value. • The exercise of the stock acquisition rights is, in principle, restricted during a one-year period from the allotment date, and one-third of the total number of exercisable stock acquisition rights will vest and be exercisable each year thereafter.
Titles are as of the date of submission of this document. *2 Due to rounding, individual sums may not total 100%. *3 For the metrics and actual financial results used to determine the amount of remuneration linked to business results, refer to “Corporate Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2023” below. - 67 - Table of Contents *4 The weighted-average fair value per share at the date of grant of stock acquisition rights granted during the fiscal year ended March 31, 2023 was 3,123 yen and was estimated using the Black-Scholes option-pricing model with several assumptions.
Titles are as of the date of submission of this document. *2 Due to rounding, individual sums may not total 100%. *3 For the metrics and actual financial results used to determine the amount of remuneration linked to business results, refer to “(5) Corporate Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2024” below. *4 The weighted-average fair value per share at the date of grant of stock acquisition rights granted during the fiscal year ended March 31, 2024 was 3,665 yen and was estimated using the Black-Scholes option-pricing model with several assumptions.
(2) Recent Evaluation From February through April 2023, under the leadership of the Chairman and the Vice Chairman of the Board, the Board conducted the Evaluation mainly in respect of Board and Committee activities in the fiscal year ended March 31, 2023 after confirming that actions proposed in response to the results of the previous Evaluation were appropriately taken.
(2) Recent Evaluation From February through May 2024, under the leadership of the Chair of the Board, the Board conducted the Evaluation mainly in respect of Board and Committee activities in the fiscal year ended March 31, 2024 after confirming that actions proposed in response to the results of the previous Evaluation were appropriately taken.
Sony has generally maintained good relationships with these labor unions. In Europe, Sony also maintains good labor relations with the European Works Council and the local Unions and Works Councils. In the Music segment, Sony has a labor union and generally considers its labor relations to be good.
In China, most employees are members of labor unions. Sony has generally maintained good relationships with these labor unions. In Europe, Sony also maintains good labor relations with the European Works Council and the local Unions and Works Councils. In the Music segment, Sony has a labor union and generally considers its labor relations to be good.
Sony generally considers its labor relations to be good. In Japan, Sony Group Corporation and several subsidiaries have labor unions. In the G&NS, ET&S and I&SS segments, Sony owns many manufacturing sites, particularly in Asia, where a few sites have labor unions that have union contracts. In China, most employees are members of labor unions.
Sony generally considers its labor relations to be good. In Japan, Sony Group Corporation and several subsidiaries have labor unions. - 91 - Table of Contents In the G&NS, ET&S and I&SS segments, Sony owns many manufacturing sites, particularly in Asia, where a few sites have labor unions that have union contracts.
(2) Details of Actions Taken by the Nomination Committee During the fiscal year ended on March 31, 2023, the Nomination Committee convened 5 times. The attendance records of respective Directors are as follows.
(2) Details of Actions Taken by the Nominating Committee During the fiscal year ended March 31, 2024, the Nominating Committee convened 5 times. The attendance records of respective Directors are as follows.
In addition, each secretariat office shares the annual schedule of the meetings and anticipated agenda items in advance with the members in order to appropriately set the frequency of meetings and the number of agenda items to be deliberated at each meeting.
In addition, under supervision by the Chairs of the Board and each Committee, each secretariat office shares the annual schedule of the meetings and anticipated agenda items in advance with the members in order to appropriately set the frequency of meetings and the number of agenda items to be deliberated at each meeting.
(6) Policy and Procedure for Selection and Dismissal of Senior Executives Sony Group Corporation appoints Corporate Executive Officers including the CEO and other officers that assume important roles for the management of Sony as “Senior Executives.” The Board has the authority to appoint and dismiss and assign the roles and responsibilities of, or to request a report regarding such matters for Senior Executives, including the CEO, and exercises such authority as necessary.
For an outline of the directors and officers liability insurance policy, refer to “ Outline of the Terms of Directors and Officers Liability Insurance Policy ”. - 81 - Table of Contents (6) Policy and Procedure for Selection and Dismissal of Senior Executives Sony Group Corporation appoints Corporate Executive Officers including the CEO and other officers that assume important roles for the management of Sony as “Senior Executives.” The Board has the authority to appoint and dismiss and assign the roles and responsibilities of, or to request a report regarding such matters for Senior Executives, including the CEO, and exercises such authority as necessary.
(formerly Sony AI Inc.). (3) Basic policy regarding Director and Senior Executive remuneration The basic policy regarding remuneration for respective Directors and Senior Executives determined by the Compensation Committee is as follows: (a) Basic policy regarding Director remuneration The primary duty of Directors is to supervise the performance of business operations of Sony as a whole.
(3) Basic policy regarding Director and Senior Executive remuneration The basic policy regarding remuneration for respective Directors and Senior Executives including Corporate Executive Officers determined by the Compensation Committee is as follows: (a) Basic policy regarding Director remuneration The primary duty of Directors is to supervise the performance of business operations of the Sony Group as a whole.
Each secretariat office explains the meeting agenda to the members and provides them with presentation materials in advance of each meeting date and facilitates deliberation in separate meetings or briefing sessions depending on the nature of matters to be discussed.
Each secretariat office explains the meeting agenda to the members and provides them with presentation materials in advance of each meeting date and facilitates deliberation in separate meetings or briefing sessions depending on the nature of matters to be discussed. Each secretariat office also provides the absent members with a follow up briefing, as appropriate.
(present) June 2020 Director, the Corporation (present) Neil Hunt Responsibility as a Director: Director in charge of Information Security Date of Birth: January 12, 1962 Number of Years Served as a Director: — Brief Personal History and Principal Business Activities Outside the Corporation: June 1989 Founder, CTO, Iconicon October 1991 Director of Engineering, Pure Atria, Inc.
(present) Neil Hunt Responsibility as a Director: Director in charge of Information Security Date of Birth: January 12, 1962 Number of Years Served as a Director: 1 year Brief Personal History and Principal Business Activities Outside the Corporation: June 1989 Founder, CTO, Iconicon October 1991 Director of Engineering, Pure Atria, Inc. December 1999 Chief Product Officer, Netflix, Inc.
June 2002 Director, Deputy Head of Research, Sony Computer Science Laboratories, Inc. July 2008 Director, Head of Research, Sony Computer Science Laboratories, Inc. July 2011 President and CEO, Sony Computer Science Laboratories, Inc. (present) June 2016 Corporate Executive, the Corporation June 2018 SVP, the Corporation April 2020 CEO, Sony AI Inc.
June 2002 Director, Deputy Head of Research, Sony Computer Science Laboratories, Inc. July 2008 Director, Head of Research, Sony Computer Science Laboratories, Inc. July 2011 President and Chief Executive Officer, Sony Computer Science Laboratories, Inc. (present) June 2016 Corporate Executive, the Corporation June 2018 Senior Vice President, the Corporation April 2020 Chief Executive Officer, Sony AI Inc.
Name Meeting Records *1 Attendance Records *1 Shuzo Sumi *2 5 Times 5 Times (100%) Yoshihiko Hatanaka 5 Times 5 Times (100%) Wendy Becker 5 Times 5 Times (100%) *1 The numbers of the Meeting Records and the Attendance Records are those applicable to the fiscal year ended on March 31, 2023. *2 Shuzo Sumi, who was a member of the Nomination Committee during the fiscal year ended on March 31, 2023, retired both as a Director and a member of the Nomination Committee at the conclusion of the Ordinary General Meeting of Shareholders on June 20, 2023.
Name Meeting Records *1 Attendance Records *1 Yoshihiko Hatanaka 5 Times 5 Times (100%) Toshiko Oka*2 5 Times 5 Times (100%) Wendy Becker 5 Times 5 Times (100%) *1 The numbers of the Meeting Records and the Attendance Records are those applicable to the fiscal year ended March 31, 2024. *2 Toshiko Oka, who was a member of the Nominating Committee during the fiscal year ended March 31, 2024, retired both as a Director and a member of the Nominating Committee at the conclusion of the Ordinary General Meeting of Shareholders on June 25, 2024.
Share Ownership The total number of shares of Common Stock beneficially owned by Directors and Corporate Executive Officers listed in “Directors and Senior Management” above (out of whom 12 people own shares) was approximately 0.043% of the total shares outstanding as of June 2, 2023.
Share Ownership The total number of shares of Common Stock beneficially owned by Directors and Corporate Executive Officers listed in “Directors and Senior Management” above (out of whom 13 people own shares) was approximately 0.054% of the total shares outstanding as of June 7, 2024.
Accordingly, Toshiko Oka was newly appointed as a member of the Nomination Committee pursuant to the resolution at the Board meeting held on June 20, 2023. During the fiscal year ended on March 31, 2023, the matters given consideration by the Nominating Committee included policies on selecting outside Director candidates, exploring Director prospects, and CEO succession.
Accordingly, Joseph A. Kraft Jr. was newly appointed as a member of the Nominating Committee pursuant to the resolution at the Board meeting held on June 25, 2024. During the fiscal year ended March 31, 2024, the matters given consideration by the Nominating Committee included policies on selecting outside Director candidates, exploring Director prospects, and CEO succession.
Name *2 Meeting Records *1 Attendance Records *1 Kenichiro Yoshida 9 Times 9 Times (100%) Hiroki Totoki 9 Times 9 Times (100%) Shuzo Sumi 9 Times 9 Times (100%) Yoshihiko Hatanaka 9 Times 9 Times (100%) Tim Shaaff 9 Times 9 Times (100%) Toshiko Oka 9 Times 9 Times (100%) Sakie Akiyama 9 Times 9 Times (100%) Wendy Becker 9 Times 9 Times (100%) Keiko Kishigami 9 Times 9 Times (100%) Joseph A.
Name*2 Meeting Records *1 Attendance Records *1 Kenichiro Yoshida 7 Times 7 Times (100%) Hiroki Totoki 7 Times 7 Times (100%) Yoshihiko Hatanaka 7 Times 7 Times (100%) Toshiko Oka 7 Times 7 Times (100%) Wendy Becker 7 Times 7 Times (100%) Sakie Akiyama 7 Times 7 Times (100%) Keiko Kishigami 7 Times 7 Times (100%) Joseph A.
(present) June 2019 Director, the Corporation (present) June 2020 Executive Deputy President and CFO, Representative Corporate Executive Officer, the Corporation April 2023 President, COO and CFO, Representative Corporate Executive Officer, the Corporation (present) Yoshihiko Hatanaka Responsibility as a Director: Chairman of the Board Chair of the Nominating Committee Date of Birth: April 20, 1957 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1980 Joined Fujisawa Pharmaceutical Co., Ltd.
(present) June 2019 Director, the Corporation (present) June 2020 Executive Deputy President, Chief Financial Officer, Representative Corporate Executive Officer, the Corporation April 2023 President, Chief Operating Officer and Chief Financial Officer, Representative Corporate Executive Officer, the Corporation (present) April 2024 Interim Corporate Executive Officer, Sony Interactive Entertainment June 2024 Chairman, Sony Interactive Entertainment (present) Yoshihiko Hatanaka Responsibility as a Director: Chair of the Board Chair of the Nominating Committee Date of Birth: April 20, 1957 Number of Years Served as a Director: 5 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1980 Joined Fujisawa Pharmaceutical Co., Ltd.
(present) Outside Director, Orix Corporation (present) June 2020 Outside Director, Mitsubishi Corporation (present) Wendy Becker Responsibility as a Director: Chair of the Compensation Committee Member of the Nominating Committee Date of Birth: November 2, 1965 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: September 1987 Brand Manager, Procter & Gamble Company September 1993 Consultant, McKinsey & Company, Inc.
(present) - 67 - Table of Contents Wendy Becker Responsibility as a Director: Vice Chair of the Board Chair of the Compensation Committee Member of the Nominating Committee Date of Birth: November 2, 1965 Number of Years Served as a Director: 5 years Brief Personal History and Principal Business Activities Outside the Corporation: September 1987 Brand Manager, Procter & Gamble Company September 1993 Consultant, McKinsey & Company, Inc.
Year granted (Fiscal year ended March 31) Total number of shares subject to stock acquisition rights Exercise price per share (in thousands) 2023 290 11,390 yen 2022 280 14,350 yen 2021 260 9,237 yen 2020 248 6,705 yen 2019 214 6,440 yen 2018 33 5,231 yen 2017 126 3,364 yen 2016 15 3,404 yen 2015 86 2,410.5 yen Regarding the above compensation plans, refer to Note 21 of the consolidated financial statements.
Year granted (Fiscal year ended March 31) Total number of shares subject to stock acquisition rights Exercise price per share (in thousands) 2024 330 12,942 yen 2023 290 11,390 yen 2022 280 14,350 yen 2021 260 9,237 yen 2020 235 6,705 yen 2019 208 6,440 yen 2018 30 5,231 yen 2017 46 3,364 yen 2016 0 3,404 yen 2015 16 2,410.5 yen Regarding the above compensation plans, refer to Note 21 of the consolidated financial statements.
(currently M3, Inc.) (present) May 2001 SVP, Sony Communication Network Corporation April 2005 President and Representative Director, Sony Communication Network Corporation December 2013 EVP, CSO and Deputy CFO, Corporate Executive Officer, the Corporation April 2014 EVP and CFO, Representative Corporate Executive Officer, the Corporation June 2014 Director, the Corporation (present) April 2015 Executive Deputy President and CFO, Representative Corporate Executive Officer, the Corporation April 2018 President and CEO, Representative Corporate Executive Officer, the Corporation June 2020 Chairman, President and CEO, Representative Corporate Executive Officer, the Corporation April 2023 Chairman and CEO, Representative Corporate Executive Officer, the Corporation (present) - 61 - Table of Contents Hiroki Totoki Responsibility as a Director: — Date of Birth: July 17, 1964 Number of Years Served as a Director: 4 years Principal Business Activities Outside the Corporation: Outside Director, Recruit Co., Ltd.
(currently M3, Inc.) (present) May 2001 Senior Vice President, Sony Communication Network Corporation April 2005 President and Representative Director, Sony Communication Network Corporation December 2013 Executive Vice President, Chief Strategy Officer and Deputy Chief Financial Officer, Corporate Executive Officer, the Corporation April 2014 Executive Vice President and Chief Financial Officer, Representative Corporate Executive Officer, the Corporation June 2014 Director, the Corporation (present) April 2015 Executive Deputy President and Chief Financial Officer, Representative Corporate Executive Officer, the Corporation April 2018 President and Chief Executive Officer, Representative Corporate Executive Officer, the Corporation June 2020 Chairman, President and Chief Executive Officer, Representative Corporate Executive Officer, the Corporation April 2023 Chairman and Chief Executive Officer, Representative Corporate Executive Officer, the Corporation (present) - 66 - Table of Contents Hiroki Totoki Responsibility as a Director: — Date of Birth: July 17, 1964 Number of Years Served as a Director: 5 years Principal Business Activities Outside the Corporation: Outside Director, Recruit Co., Ltd.
Corporate Governance .” Board of Directors (1) Members: 10 Directors including 8 outside Directors (as of June 20, 2023) Name Position Kenichiro Yoshida Director Hiroki Totoki Director Yoshihiko Hatanaka Chairman of the Board Outside Director Toshiko Oka Outside Director Sakie Akiyama Outside Director Wendy Becker Outside Director Keiko Kishigami Outside Director Joseph A. Kraft Jr.
Corporate Governance .” Board of Directors (1) Members: 10 Directors including 8 outside Directors (as of June 25, 2024) Name Position Kenichiro Yoshida Director Hiroki Totoki Director Yoshihiko Hatanaka Chair of the Board Outside Director Wendy Becker Vice Chair of the Board Outside Director Sakie Akiyama Outside Director Keiko Kishigami Outside Director Joseph A. Kraft Jr.
Thereafter, the third-party evaluation was conducted by the Outside Counsel in accordance with the following steps: • Reviewed relevant material, such as the minutes of Board meetings, and attended a Board meeting; • Confirmed with the Board secretariat office and each Committee’s secretariat office how meetings of the Board and Committees were conducted; - 80 - Table of Contents • Gathered responses to a questionnaire from each Director about the current status and practices of the Board and each Committee, such as the composition of the Board, operation of the Board, commitments of each Director, activities of each Committee and procedures of the previous Evaluation; • Interviewed all the Directors including through the Peer Review(*); and • Researched other global companies’ practices in Japan, the United States and Europe, and compared them with the company’s practices.
Thereafter, the third-party evaluation was conducted by the Outside Counsel in accordance with the following steps: • Reviewed relevant material, such as the minutes of Board meetings, and attended a Board meeting; • Confirmed with the Board secretariat office and each Committee’s secretariat office how meetings of the Board and Committees were conducted; • Gathered responses to a questionnaire from each Director about the current status and practices of the Board and each Committee, such as the composition of the Board, operation of the Board, commitments of each Director, activities of each Committee and procedures of the previous Evaluation; • Interviewed the Chairs of the Board and each Committee, newly appointed Directors, and some of the Corporate Executive Officers; and • Researched other companies’ practices in Japan and the United States, and compared them with the company’s practices.
For the basic policy regarding Director and Corporate Executive Officer compensation, refer to “Item 6B. Compensation”. (3) Policy Regarding Composition of the Compensation Committee Under the Companies Act, the Compensation Committee shall consist of at least three Directors, the majority of whom shall be outside Directors.
For the basic policy regarding Director and Corporate Executive Officer compensation, refer to “Compensation” in Item 6.B. (3) Policy Regarding Composition of the Compensation Committee Under the Companies Act, the Compensation Committee shall consist of at least three Directors, the majority of whom shall be outside Directors.
There is no family relationship between any of the persons named above. There is no arrangement or understanding with major shareholders, customers, suppliers, or others pursuant to which any person named above was selected as a Director or a Corporate Executive Officer. B.
There is no arrangement or understanding with major shareholders, customers, suppliers, or others pursuant to which any person named above was selected as a Director or a Corporate Executive Officer. - 71 - Table of Contents B.
With respect to the selection of candidates for outside Directors, as a priority item for the current fiscal year, the Nominating Committee confirmed the policy that candidates for outside Directors should be selected from persons who have experience as CEOs of major global companies, backgrounds in technology and/or knowledge of the entertainment industry, and the Nomination Committee held discussions based on such policy.
With respect to the selection of candidates for outside Directors, as a priority item for the current fiscal year, the Nominating Committee confirmed the policy that candidates for outside Directors should be selected from persons who have experience as CEOs of other companies, and the Nominating Committee held discussions based on such policy.
The amount of each component and its percentage of total remuneration shall be at an appropriate level determined in accordance with the above basic policy and the individual’s level of responsibility and based on research conducted by a third party regarding remuneration of management of both Japanese and non-Japanese companies, with emphasis on linking Senior Executive remuneration to business results and shareholder value.
The amount of each component and its percentage of total remuneration shall be at an appropriate level determined in accordance with the above basic policy and the individual’s level of responsibility and based on research conducted by a third party regarding remuneration of management of both Japanese and non-Japanese companies, with an emphasis on linking Senior Executive remuneration to business results and shareholder value. - 74 - Table of Contents Type of remuneration Description Fixed remuneration • The amount of fixed remuneration shall be at an appropriate level determined based on research conducted by a third party regarding remuneration of management of both Japanese and non-Japanese companies, according to his/her responsibility, and in order to maintain competitiveness in recruiting talent.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Reports do not specify whether reported ownership is direct or beneficial. - 86 - Table of Contents Date of Report* Reported entities Reported number of direct or indirect owned and deemed owned shares** Reported percentage of direct or indirect owned and deemed owned shares** October 6, 2020 Nomura Asset Management Co., Ltd. and 3 Joint Holders 63,156,882 5.01 June 6, 2022 Sumitomo Mitsui Trust Asset Management Co., Ltd. and 1 Joint Holder 82,189,224 6.52 May 18, 2023 BlackRock Japan Co., Ltd. and 9 Joint Holders 93,769,348 7.43 * The table above contains information from the most recent updated Reports. ** Shares issuable or transferable upon exchange of exchangeable securities, conversion of convertible securities or exercise of warrants or stock acquisition rights (including those incorporated in bonds with stock acquisition rights) are taken into account in determining both the size of the reported entity’s holding and Sony’s total issued share capital.
Biggest changeDate of Report* Reported entities Reported number of direct or indirect owned and deemed owned shares** Reported percentage of direct or indirect owned and deemed owned shares** October 6, 2020 Nomura Asset Management Co., Ltd. and 3 Joint Holders 63,156,882 5.01 June 6, 2022 Sumitomo Mitsui Trust Asset Management Co., Ltd. and 1 Joint Holder 82,189,224 6.52 May 18, 2023 BlackRock Japan Co., Ltd. and 9 Joint Holders 93,769,348 7.43 * The table above contains information from the most recent updated Reports. ** Shares issuable or transferable upon exchange of exchangeable securities, conversion of convertible securities or exercise of warrants or stock acquisition rights (including those incorporated in bonds with stock acquisition rights) are taken into account in determining both the size of the reported entity’s holding and Sony’s total issued share capital.
The following table summarizes the Bulk Shareholding Reports related to Sony (each a “Report”) submitted to the Bureau, where it is reported that ownership percentage by the reported entity exceeds 5% in the most recent updated Report.
The following table summarizes the Bulk Shareholding Reports related to Sony (each a “Report”) submitted to the Bureau, where it is reported that ownership percentage by the reported entity exceeds 5% in the most recent updated Report. The Reports do not specify whether reported ownership is direct or beneficial.
As of March 31, 2023, the number of registered ADR holders was 4,697 and the number of registered holders of Common Stock in the U.S. was 389.
As of March 31, 2024, the number of registered ADR holders was 4,497 and the number of registered holders of Common Stock in the U.S. was 371.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders As of March 31, 2023, there were 1,261,081,781 shares of Common Stock outstanding, including 26,584,521 shares of treasury stock.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders As of March 31, 2024, there were 1,261,231,889 shares of Common Stock outstanding, including 39,783,303 shares of treasury stock.
Out of the total outstanding shares, 117,871,924 shares were in the form of American Depositary Receipts (“ADRs”) and 215,074,779 shares were held of record in the form of Common Stock by residents in the U.S.
Out of the total outstanding shares, 108,397,166 shares were in the form of American Depositary Receipts (“ADRs”) and 223,264,868 shares were held of record in the form of Common Stock by residents in the U.S.
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Interests of Experts and Counsel Not Applicable - 93 - Table of Contents

Other SONY 10-K year-over-year comparisons