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What changed in Sony Group Corp's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Sony Group Corp's 2022 and 2023 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 2023 report.

+639 added−550 removedSource: 20-F (2023-06-20) vs 20-F (2022-06-28)

Top changes in Sony Group Corp's 2023 20-F

639 paragraphs added · 550 removed · 390 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

62 edited+14 added−20 removed117 unchanged
Biggest changeIn addition, in the fiscal year ended March 31, 2022, Sony made an additional strategic investment in Epic Games, acquired 100% of the equity interest in Ellation Holdings, Inc. (“Ellation”), a subsidiary of AT&T Inc. which operated the anime business Crunchyroll, made a minority investment in Japan Advanced Semiconductor Manufacturing Inc.
Biggest change(“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.
Further losses in 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.
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.
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, 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 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.
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 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, and coordinating distributed denial-of-service attacks to render services unavailable.
In addition, the G&NS, Music and Pictures segments must invest substantial amounts, which may include significant upfront investments, in internally developed software titles, artist advances, motion picture productions, television productions and broadcast programming before knowing whether their products will receive customer acceptance.
In addition, the G&NS, Music and Pictures segments must invest substantial amounts, which may include significant upfront investments, in internally developed software titles, artist advances, music catalogs, motion picture productions, television productions and broadcast programming before knowing whether their products will receive customer acceptance.
In addition, offices and facilities used by Sony, its suppliers, service providers and business partners, including those used for network, telecommunications and information systems infrastructure, R&D, material procurement, manufacturing, motion picture and television production, logistics, sales, and online and other services are located throughout the world and are subject to possible destruction, temporary stoppage or disruption as a result of unexpected catastrophic events such as natural disasters, pandemic diseases, terrorist attacks, armed conflicts, large-scale power outages and large-scale fires.
In addition, offices and facilities used by Sony, its suppliers, service providers and business partners, including those used for network, telecommunications and information systems infrastructure, R&D, material procurement, manufacturing, motion picture and television production, logistics, sales, and online and other services are located throughout the world and are subject to possible destruction, temporary stoppage or disruption as a result of unexpected catastrophic events such as natural disasters, pandemic diseases including COVID-19, terrorist attacks, armed conflicts, large-scale power outages and large-scale fires.
Any credit rating downgrades may, in turn, result in an increase in Sony’s cost of funding and may have an adverse impact on Sony’s ability to access commercial paper or mid- to long-term debt markets on acceptable terms.
Any credit rating downgrades may, in turn, result in an increase in Sony’s cost of funding and may have an adverse impact on Sony’s ability to access commercial paper (“CP”) or mid- to long-term debt markets on acceptable terms.
Sony could incur asset impairment losses for goodwill, intangible assets or other non-current assets. Sony has a significant amount of goodwill, intangible assets and other non-current assets, including production facilities and equipment.
Sony could incur asset impairment losses for goodwill, content assets and other intangible assets or other non-current assets. Sony has a significant amount of goodwill, content assets, other intangible assets and other non-current assets, including production facilities and equipment.
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 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.
For example, in the EP&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 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.
As of March 31, 2022, 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, 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.
In the Music and Pictures segments, operating results can be impacted by worldwide consumer acceptance of their products, which is difficult to predict, by competing products released at or near the same time and by alternative forms of entertainment and leisure activities available to consumers.
In the Music and Pictures segments, operating results can be impacted by worldwide consumer acceptance of their products, which is difficult to predict, and by alternative forms of entertainment and leisure activities available to consumers, as well as by competing products released at or near the same time.
In order to continue to create content, develop services, design, manufacture, market, and sell products, in increasingly competitive markets, Sony must attract, retain and maintain productive relations with key personnel, - 12 - Table of Contents both internally and externally, who possess high levels of expertise and broad experience, including its executive team, other management professionals, creative talent, and hardware and software engineers.
In order to continue to create content, develop services, design, manufacture, market, and sell products, in increasingly competitive markets, Sony must attract, retain and maintain productive relations with key personnel, both internally and externally, who possess high levels of expertise and broad experience, including its executive team, other management professionals, creative talent, and hardware and software engineers.
Under the Foreign Exchange Regulations, an “inward direct investment” includes an acquisition by a foreign investor of shares of common stock of Sony Group Corporation, the consummation of which results in such foreign investor, in - 17 - Table of Contents combination with any existing shareholding, directly or indirectly holding 1% or more of the total number of issued shares of common stock or the total number of voting rights of Sony Group Corporation, unless certain exemptions apply.
Under the Foreign Exchange Regulations, an “inward direct investment” includes an acquisition by a foreign investor of shares of common stock of Sony Group Corporation, the consummation of which results in such foreign investor, in combination with any existing shareholding, directly or indirectly holding 1% or more of the total number of issued shares of common stock or the total number of voting rights of Sony Group Corporation, unless certain exemptions apply.
Also, Sony’s financial results and condition could be adversely affected by future pension funding requirements pursuant to the Japanese Defined Benefit Corporate Pension Plan Act (“Act”). Under the Act, Sony is required to conduct a periodic actuarial revaluation and to ascertain whether certain financial criteria have been met after the annual accounting closing.
Also, Sony’s financial results and condition could be adversely affected by future pension funding requirements pursuant to the Japanese Defined Benefit Corporate Pension Plan Act (the “Pension Plan Act”). Under the Pension Plan Act, Sony is required to conduct a periodic actuarial revaluation and to ascertain whether certain financial criteria have been met after the annual accounting closing.
As a result, Sony may seek other sources of financing to fund operations, such as the draw-down of funds from contractually committed lines of credit from financial institutions or the sale of assets, in order to repay commercial paper and mid- to long-term debt as they become due, and to meet other operational and liquidity needs.
As a result, Sony may seek other sources of financing to fund operations, such as the draw-down of funds from contractually committed lines of credit from financial institutions or the sale of assets, in order to repay CP and mid- to long-term debt as they become due, and to meet other operational and liquidity needs.
However, such key personnel are in high demand. In addition, business divestitures, restructuring or other transformation initiatives may lead to an unintended loss of experienced human resources or know-how. Actual or threatened work slowdowns or stoppages related to unionized workers, particularly in the entertainment field, could lead to delayed releases or cost increases.
However, such key personnel are in high demand. In addition, business divestitures, restructuring or other transformation initiatives may lead to an unintended loss of experienced employees or know-how. Actual or threatened work slowdowns or stoppages related to unionized workers, particularly in the entertainment field, could lead to delayed releases or cost increases.
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 operating results and financial condition through an increase in the allowance for credit losses.
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.
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.
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.
Also, many Sony products are connected to the internet, and regularly communicate with services provided by Sony or third parties. - 15 - Table of Contents Sony’s efforts to adapt to rapid advancements in technologies and increased demand for mobile products and online services, while also maintaining product quality and product security, may not be successful and may increase exposure to product liability.
Also, many Sony products are connected to the internet, and regularly communicate with services provided by Sony or third parties. Sony’s efforts to adapt to rapid advancements in technologies and increased demand for mobile products and online services, while also maintaining product quality and product security, may not be successful and may increase exposure to product liability.
In addition to the above, Sony’s future effective tax rates may be unfavorably affected by changes in both the statutory rates and the mix of earnings in countries with differing statutory rates or by other factors such as changes in tax laws and regulations or their interpretation, including minimum tax requirements and limitations or restrictions on various tax deductions and credits, including deductions for royalties and interest.
Sony’s future effective tax rates may also be unfavorably affected by changes in both the statutory rates and the mix of earnings in countries with differing statutory rates or by other factors such as changes in tax laws and regulations or their interpretation, including minimum tax requirements and limitations or restrictions on various tax deductions and credits, including deductions for royalties and interest.
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 - 10 - Table of Contents 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 but does not directly control the suppliers’ procurement or employment practices.
For example, digital technology, the availability of digital media, and global internet penetration impact Sony’s ability to protect its copyrighted content from unauthorized duplication, digital theft and counterfeiting, putting pressure on legitimate product sales.
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.
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.
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.
For example, as a response to the worsening of the situation in Ukraine and Russia that began in the fiscal year ended March 31, 2022, as of the - 11 - Table of Contents date of this report, Sony has suspended its business in Russia.
For example, as a response to the worsening of the situation in Ukraine and Russia that began in the fiscal year ended March 31, 2022, as of the date of this report, Sony has suspended its business in Russia.
There is no assurance that such subsidies will be continued at all or in the same amounts upon renewal of Sony’s agreements with these carriers - 9 - Table of Contents or in agreements Sony enters into with new carriers.
There is no assurance that such subsidies will be continued at all or in the same amounts upon renewal of Sony’s agreements with these carriers or in agreements Sony enters into with new carriers.
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.
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.
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 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 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.
Sony invested 180.0 billion yen and 237.1 billion yen of capital in the fiscal years ended March 31, 2021 and 2022, 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 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’s facilities and operations are subject to damage and disruption as a result of catastrophic disasters, outages or similar events that could lead to supply chain, manufacturing and other business disruptions and have an adverse impact on Sony’s operating results.
Sony’s facilities and operations are subject to damage and disruption as a result of catastrophic disasters, outages, pandemic diseases including COVID-19, or similar events that could lead to supply chain, manufacturing and other business disruptions and have an adverse impact on Sony’s operating results.
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 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 - 13 - Table of Contents officers or employees, third-party service providers or other business partners.
Sony’s cyber insurance may not cover all expenses and losses and, accordingly, such breaches or other compromises of Sony’s information security or that of its third-party service providers or business partners may have an adverse impact on Sony’s operating results and financial condition. Sony’s business may suffer as a result of adverse outcomes of litigation and regulatory actions.
Sony’s cyber insurance may not cover all expenses and losses and, accordingly, such breaches or other compromises of Sony’s information security or that of its third-party service providers or business partners may have an adverse impact on Sony’s operating results and financial condition.
As of March 31, 2022, the unrecognized deferred tax assets amounted to 240.8 billion yen. An increase in unrecognized deferred tax assets may have an adverse impact on Sony’s operating results and financial condition. - 16 - Table of Contents Deferred tax assets are evaluated on a jurisdiction by jurisdiction basis.
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.
In the fiscal year ended March 31, 2022, 27.9%, 27.9% and 18.8% 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, 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.
Capitalization and Indebtedness Not Applicable C. Reasons for the Offer and Use of Proceeds Not Applicable D. Risk Factors This section contains forward-looking statements that are subject to the Cautionary Statement appearing on page 2 of this annual report.
Item 3. Key Information A. [Reserved] B. Capitalization and Indebtedness Not Applicable C. Reasons for the Offer and Use of Proceeds Not Applicable D. Risk Factors This section contains forward-looking statements that are subject to the Cautionary Statement appearing on page 2 of this annual report. Risks to Sony are also discussed elsewhere in this annual report.
The market changes discussed above, Sony’s management of these changes or the occurrence of earthquakes, pandemic disease or other catastrophic events in Japan could expose the life and non-life insurance businesses to increasing costs or adverse impact on their ability to meet policy commitments.
The market changes discussed above, Sony’s management of these changes or the occurrence of earthquakes, pandemic disease or other catastrophic events in Japan could expose the life and non-life insurance businesses to increasing costs or adverse impact on their ability to satisfy insurance contract liabilities. Insurance contract liabilities are calculated based on many actuarial assumptions that are uncertain.
In terms of consumer electronics products, to produce products that appeal to changing and increasingly diverse consumer preferences, including growing consumer interest in products that minimize energy consumption and other impacts on climate change, or to overcome the fact that a relatively high percentage of consumers already possess similar products, Sony must develop superior technology, anticipate consumer tastes and rapidly develop attractive and differentiated - 7 - Table of Contents products with competitive prices and features.
In terms of consumer electronics products, to produce products that appeal to changing and increasingly diverse consumer preferences, including constantly changing consumer interest in minimizing energy consumption and using environmentally friendly materials for both products and packaging, or to overcome the fact that a relatively high percentage of consumers already possess similar products, Sony must develop superior technology, anticipate consumer tastes, and rapidly develop attractive and differentiated products with competitive prices and features.
Sony is subject to financial and reputational risks due to product quality, product security, and liability issues. Sony’s products and services, such as consumer electronics products, non-consumer products, parts and components, semiconductors, software and network services are becoming increasingly sophisticated and complicated as rapid advancements in technologies occur and as demand increases for mobile products and online services.
Sony’s products and services, such as consumer electronics products, non-consumer products, parts and components, semiconductors, software and network services are becoming increasingly sophisticated and complicated as rapid advancements in technologies occur and as demand increases for mobile products and online services.
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.
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.
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 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.
In addition, extreme weather conditions may - 14 - Table of Contents become more severe and frequent as the temperature rises due to the effects of climate change, and such extreme weather conditions could heighten the risks and uncertainties noted above.
These situations may have an adverse impact on Sony’s operating results and financial condition. In addition, extreme weather conditions may become more severe and frequent as the temperature rises due to the effects of climate change, and such extreme weather conditions could heighten the risks and uncertainties noted above.
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 Sony Interactive Entertainment’s acquisition of Bungie, Inc. (“Bungie”), an independent videogame developer in the United States, and the merger of Sony Pictures Networks India (“SPNI”) with Zee Entertainment Enterprises Ltd.
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.
Sony faces the risk of litigation and regulatory actions in different countries in connection with its operations. Legal proceedings, including regulatory actions, may seek to recover very large indeterminate amounts or to limit Sony’s operations, and the possibility that they may arise and their magnitude may remain unknown for substantial periods of time.
Legal proceedings, including regulatory actions, may seek to recover very large indeterminate amounts or to limit Sony’s operations, and the possibility that they may arise and their magnitude may remain unknown for substantial periods of time. For example, legal proceedings, including regulatory actions, may result from antitrust scrutiny of market practices for anti-competitive conduct.
However, if economic activity stagnates again due to a future increase in 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, 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.
Furthermore, as movie theaters continue to reopen and box office revenues recover, the theatrical release calendar of films by major studios could become crowded, increasing competition for available screen space. This situation could adversely affect revenues in the Pictures 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.
Violation of applicable laws or regulations by Sony, its employees, third-party suppliers, business partners and agents may subject Sony to monetary fines, penalties, legal judgments, restrictions on business operations and/or reputational damage. Additionally, there is a growing global regulatory and consumer focus on corporate social responsibility and sourcing practices and increasing regulatory obligations of public disclosure regarding these matters.
Violation of applicable laws or regulations by Sony, its officers or employees, third-party suppliers, business partners or agents may subject Sony to monetary fines, penalties, legal judgments, restrictions on business operations and/or reputational damage.
In the fiscal year ended March 31, 2022, Sony 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, for consideration of 49.8 billion yen.
(“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.
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.
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.
To strengthen the competitiveness of its products and services, Sony continues to invest in research and development (“R&D”), particularly in growth areas such as the Imaging & Sensing Solutions (“I&SS”) and G&NS segments. However, Sony may not be successful in investing in R&D if it fails to identify products, services and market trends with significant growth potential.
To strengthen the competitiveness of its products and services, Sony continues to invest in research and development (“R&D”), particularly in growth areas such as the Game & Network Services (“G&NS”) and Imaging & Sensing Solutions (“I&SS”) segments.
Sony employees have been working both in the office and at home during the spread of COVID-19 and are expected to continue doing so for the time being.
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.
For example, legal proceedings, including regulatory actions, may result from antitrust scrutiny of market practices for anti-competitive conduct. 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.
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.
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.
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 investments may not yield the innovation or the expected results quickly enough, or competitors may lead Sony in technological innovation. This may hinder Sony’s ability to commercialize new and competitive products and services. Sony must continually introduce, enhance and stimulate customer demand for consumer electronic products and network services.
However, Sony may not be successful in investing in R&D if it fails to identify products, services and market trends with significant growth potential. In addition, Sony’s investments may not yield the innovation or the expected results quickly enough, or competitors may lead Sony in technological innovation. This may hinder Sony’s ability to commercialize new and competitive products and services.
In particular, there is increased attention on labor practices, including work environments at electronic component manufacturers and original design manufacturing/original equipment manufacturing, or ODM/OEM, product manufacturers operating in Asia.
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.
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.
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.
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.
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.
(“JASM”), 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. In some cases, the completion of mergers and acquisitions is subject to certain closing conditions, including regulatory approvals.
In some cases, the completion of mergers and acquisitions is subject to certain closing conditions, including regulatory approvals.
In the Music segment, new music releases, in-person concerts and other events, as well as the licensing of music in TV commercials, all of which are in the process of recovering, could be restricted again, causing related revenues to decrease.
In the G&NS segment, the production of hardware could be adversely affected again due to issues in the component supply chain. In the Music segment, in-person concerts and other events could be restricted again, causing related revenues to decrease.
Historically, Sony’s primary sources of funds have been cash flows from operations, the issuance of commercial paper and other debt securities, such as term debt, as well as borrowings from banks and other institutional lenders. There can be no assurance that such sources will continue to be available on acceptable terms or be sufficient to meet Sony’s needs.
There can be no assurance that such sources will continue to be available on acceptable terms or be sufficient to meet Sony’s needs.
For example, in the fiscal year ended March 31, 2015, the Pictures segment was subject to a cyber-attack that resulted in unauthorized access to, and theft and disclosure of, Sony business information, including employee information and other information, and the destruction of data.
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.
The Electronics Products & Solutions (“EP&S”)* segment could continue to be adversely impacted by factory shutdowns and supply chain issues, and by the closure of retail stores globally. For example, in China in May 2021, certain manufacturing sites and suppliers’ manufacturing sites ceased production for a period of time pursuant to local government policy.
The ET&S segment could continue to be adversely impacted by factory shutdowns or declines in factory utilization, supply chain issues and the closure of retail stores globally. Sony may also be exposed to price increases for raw materials, parts and components, and lower demand from commercial customers.
Worsened or prolonged supply shortages may further adversely affect the operating results of the G&NS, EP&S and I&SS segments. Reliance on third-party software and technologies may make it increasingly difficult for Sony to differentiate its products from competitors’ products.
Although 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.
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Item 3. Key Information A. [Reserved] Selected Financial Data Sony adopted IFRS for the first time this fiscal year (commenced on April 1, 2021 and ended on March 31, 2022). Therefore, the following selected financial data are provided in accordance with IFRS.
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Sony must overcome increasingly intense competition, which could lead to lower revenue or operating margins.
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Yen in millions Fiscal year ended March 31 2021 2022 Consolidated Statements of Income data: Sales and financial services revenue 8,998,661 9,921,513 Operating income 955,255 1,202,339 Income before income taxes 997,965 1,117,503 Net income attributable to Sony Group Corporation’s stockholders 1,029,610 882,178 Comprehensive income attributable to Sony Group Corporation’s stockholders 1,118,628 623,678 Consolidated Statements of Financial Position data: Sony Group Corporation’s stockholders’ equity 6,680,343 7,144,471 Common stock 880,214 880,365 Net assets 6,724,339 7,197,249 Total assets 27,507,843 30,480,967 Number of shares issued at fiscal year-end (thousands of shares of common stock) 1,261,059 1,261,082 Ratio of stockholders’ equity to total assets (%) 24.3 23.4 Data per share of Common Stock data: Sony Group Corporation’s stockholders’ equity per share of common stock 5,390.73 5,775.63 Net income attributable to Sony Group Corporation’s stockholders (Yen) — Basic 836.75 711.84 — Diluted 823.77 705.16 Other data: Cash dividends declared — Interim 25.00 30.00 (23.91 cents ) (26.55 cents ) Cash dividends declared — Fiscal year-end 30.00 35.00 (27.29 cents ) (26.72 cents ) B.
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This situation could adversely affect the operating results of the Pictures segment.
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Risks to Sony are also discussed elsewhere in this annual report. - 6 - Table of Contents The COVID-19 pandemic has adversely affected, and is expected to continue to adversely affect, Sony’s business operations, operating results and financial condition.
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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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Although there has been a resurgence of new strains of COVID-19, vaccination is progressing and economic activities are resuming around the world, balanced with anti-infection measures.
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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.
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The timing and extent to which the pandemic further negatively impacts Sony’s business could vary greatly depending on the timing and extent to which COVID-19 declines, as well as the state of lockdowns and other measures in various geographic areas around the world, and their impact on macroeconomic conditions.
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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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For example, in the Game & Network Services (“G&NS”) segment, there could be a further adverse impact on the production of hardware due to issues in the component supply chain.
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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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The continued impact of COVID-19 could heighten many of the risks and uncertainties noted below. * The Electronics Products & Solutions (EP&S) segment has been renamed the Entertainment, Technology & Services (ET&S) segment effective from April 2022. Sony must overcome increasingly intense competition, which could lead to lower revenue or operating margins.
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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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Additionally, the spread of COVID-19 starting in the beginning of the 2020 calendar year resulted in lockdowns around the world, which are influencing changes in consumer behavior.
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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.
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For - 8 - Table of Contents example, in September 2020, in order to achieve further growth and strengthen governance within the financial services business with the goal of enhancing the corporate value of the entire Sony Group, Sony acquired all of the common shares and related stock acquisition rights of Sony Financial Group Inc.
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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.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

69 edited+110 added−14 removed74 unchanged
Biggest changeSony Bank competes with traditional banking institutions, regional banks, trust banks, non-bank companies, and newer financial groups providing online full-services of bank and brokerage in Japan. - 27 - Table of Contents In the Financial Services segment, it is important to maintain a strong and healthy financial foundation for the business as well as to meet diversifying customer needs.
Biggest changeIn 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 September 2016, the joint venture became a wholly-owned subsidiary of Sony Group Corporation. In January 2021, Sony/ATV Music Publishing LLC changed its name to Sony Music Publishing (US) LLC.
In September 2016, the joint venture became a wholly-owned subsidiary of Sony Group Corporation. In January 2021, Sony/ATV changed its name to Sony Music Publishing (US) LLC.
Certain of these licenses are important to Sony’s business. Sony products that employ Blu-ray Disc ™ player functionality, including PlayStation ® 4 (“PS4 ™ ”) 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 MPEG LA LLC and One-Blue, LLC.
SPE’s library of motion pictures and television programming is licensed to linear 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).
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).
Sony’s subsidiaries in the Financial Services segment are subject to the Japanese Insurance Business Act and Banking Act that require insurance and business companies to maintain their financial credibility and to secure protection for policyholders and depositors in view of the public importance of insurance and banking services.
Sony’s subsidiaries in the Financial Services segment are subject to the Insurance Business Act and the Banking Act that require insurance and banking business companies to maintain their financial credibility and to secure protection for policyholders and depositors in view of the public importance of insurance and banking services.
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”).
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.
Key Information. ” G&NS, EP&S, I&SS and All Other Sony believes that its product planning and product design expertise, the high quality of its products, its record of innovative product introductions and product improvements, the user experience it provides and the ecosystem that supports such an experience, its price competitiveness derived from reductions in manufacturing and indirect costs, and its extensive marketing and servicing efforts are important factors in maintaining its competitive position.
Key Information. ” G&NS, ET&S, I&SS and All Other Sony believes that its product planning and product design expertise, the high quality of its products, its record of innovative product introductions and product improvements, the user experience it provides and the ecosystem that supports such an experience, its price competitiveness derived from reductions in manufacturing and indirect costs, and its extensive marketing and servicing efforts are important factors in maintaining its competitive position.
In particular, life insurance companies must maintain a premium reserve (for the portion of their portfolio other than unearned premiums), an unearned premium reserve, a reserve for refunds with respect to certain insurance contracts of life insurance companies specified in the Insurance Business Act’s regulations, and a contingency reserve in amounts no lower than the amount of the “standard policy reserve” as set forth by the regulatory guidelines.
In particular, life insurance companies must maintain a premium reserve (for the portion of their portfolio other than unearned premiums), an unearned premium reserve, a reserve for refunds with respect to certain insurance contracts of life insurance companies specified in the Insurance Business Act’s regulations, and a contingency reserve in amounts not lower than the amount of the “standard policy reserve” as set forth by the regulatory guidelines.
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 Sony Financial Group Inc. (“SFGI”).
Sony’s products and services in the EP&S and I&SS segments are primarily marketed throughout the world under the trademark “Sony.” In most cases, Sony’s products in the EP&S and I&SS segments are sold to sales subsidiaries of Sony Group Corporation located in or responsible for sales in various countries and territories.
Sony’s products and services in the ET&S and I&SS segments are primarily marketed throughout the world under the trademark “Sony.” In most cases, Sony’s products in the ET&S and I&SS segments are sold to sales subsidiaries of Sony Group Corporation located in or responsible for sales in various countries and territories.
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, 2022 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, 2023 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. 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. - 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.
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, EP&S and I&SS segments.
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.
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 EP&S segments due to demand in the year-end holiday season. Japan: Sony Marketing (Japan) 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. Japan: Sony Marketing Inc. markets consumer electronics products mainly through retailers. It also markets professional electronics products and services.
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 - 24 - Table of Contents 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.
For example, Sony has taken steps to address new regulations or governmental policies related to climate change including carbon disclosure, greenhouse gas emission reduction, carbon taxes and energy efficiency for products in the G&NS, EP&S and I&SS segments. Also refer to “Risk Factors” in “Item 3.
For example, Sony has taken steps to address new regulations or governmental policies related to climate change including carbon disclosure, greenhouse gas (“GHG”) emission reduction, carbon taxes and energy efficiency for products in the G&NS, ET&S and I&SS segments. Also refer to “Risk Factors” in “Item 3.
These businesses are operated primarily by SMEJ. - 21 - Table of Contents Pictures Motion Pictures: “Motion Pictures” includes the worldwide production, acquisition and distribution of live-action and animated motion pictures. SPE’s motion picture production organizations include Columbia Pictures, Screen Gems, TriStar Pictures, 3000 Pictures, Sony Pictures Animation, Stage 6 Films, AFFIRM Films and Sony Pictures Classics.
These businesses are operated primarily by SMEJ. Pictures Motion Pictures: “Motion Pictures” includes the worldwide production, acquisition and distribution of live-action and animated motion pictures. SPE’s motion picture production organizations include Columbia Pictures, Screen Gems, TriStar Pictures, 3000 Pictures, Sony Pictures Animation, Stage 6 Films, AFFIRM Films and Sony Pictures Classics.
In January 2013, Sony Group Corporation acquired all of the common shares of So-net through a tender offer and subsequent share exchange and, as a result of the acquisition, So-net became a wholly-owned subsidiary of Sony Group Corporation. So-net was renamed Sony Network Communications Inc.
In January 2013, Sony Group Corporation acquired all of the common shares of So-net through a tender offer and subsequent share exchange and, as a result of the acquisition, So-net became a wholly-owned subsidiary of Sony Group Corporation. So-net was renamed Sony Network Communications Inc. (“SNC”) in July 2016.
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 charge-coupled devices (CCDs), large-scale integration systems (LSIs) and other semiconductors.
The subsidiary changed its name to Sony Chemical & Information Device Corporation in July 2006, and changed its name again to Dexerials Corporation in October 2012. - 18 - Table of Contents In January 1988, Sony Group Corporation acquired CBS Records Inc., the music business division of CBS Inc. in the U.S.
The subsidiary changed its name to Sony Chemical & Information Device Corporation in July 2006, and changed its name again to Dexerials Corporation in October 2012. In January 1988, Sony Group Corporation acquired CBS Records Inc., the music business division of CBS Inc. in the U.S.
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.
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.
Name of company Country of incorporation/residence (As of March 31, 2022) 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, 2023) Percentage owned Sony Interactive Entertainment Inc. Japan 100.0 Sony Music Entertainment (Japan) Inc.
The agent in the U.S. for purposes of this Item 4 is Sony Corporation of America, 25 Madison Avenue, 26 th Floor, New York, NY 10010-8601 (Attn: Office of the General Counsel). Sony files reports and other information with the SEC pursuant to the SEC’s rules and regulations that apply to foreign private issuers.
The agent in the U.S. for purposes of this Item 4 is Sony Corporation of America, 25 Madison Avenue, 26 th Floor, New York, NY 10010-8601 (Attn: Office of the General Counsel). Sony files reports and other information with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the SEC’s rules and regulations that apply to foreign private issuers.
SPE’s television networks are distributed through digital platforms (including SonyLIV in India, as well as Crunchyroll and Pure Flix primarily in North America), cable, DBS providers and telecommunications companies to viewers around the world. These networks 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 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.
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.
(“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.
Digital Software and Add-on Content includes distribution of software titles and add-on content through digital networks by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; and Hardware and Others includes home gaming consoles, packaged software, peripheral devices and first-party software for third-party platforms.
Digital Software and Add-on Content includes distribution of software titles and add-on content through the network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; and Hardware and Others includes home gaming consoles, packaged software, game software sold bundled with home gaming consoles, peripheral devices and first-party software for third-party platforms.
As of March 31, 2022, Sony Life employed 5,338 Lifeplanner ® sales specialists. Sony Life maintains an extensive service network which mainly consists of the Lifeplanner ® channel and the independent agent channel in Japan.
As of March 31, 2023, Sony Life employed 5,402 Lifeplanner ® sales specialists. Sony Life maintains an extensive service network which mainly consists of the Lifeplanner ® channel and the independent agent channel in Japan.
Japan 100.0 Sony Financial Group Inc. Japan 100.0 Sony Life Insurance Co., Ltd. Japan 100.0 Sony Bank Inc. Japan 100.0 Sony Assurance Inc. Japan 100.0 Sony Corporation of America U.S.A. 100.0 Sony Interactive Entertainment LLC U.S.A. 100.0 Sony Music Entertainment U.S.A. 100.0 Sony Music Publishing LLC U.S.A. 100.0 Sony Pictures Entertainment Inc. U.S.A. 100.0 CPT Holdings, Inc.
Japan 100.0 Sony Financial Group Inc. Japan 100.0 Sony Life Insurance Co., Ltd. Japan 100.0 Sony Bank Inc. Japan 100.0 Sony Assurance Inc. Japan 100.0 Sony Corporation of America U.S.A. 100.0 Sony Interactive Entertainment LLC U.S.A. 100.0 Sony Music Entertainment U.S.A. 100.0 Sony Music Publishing LLC U.S.A. 100.0 Sony Pictures Entertainment Inc. U.S.A. 100.0 Columbia Pictures Industries, Inc.
Principal Capital Investments In the fiscal years ended March 31, 2021 and 2022, Sony’s capital expenditures were 542.4 billion yen and 697.2 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, 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.
In January 2000, acquisition transactions by way of a share exchange were completed such that three subsidiaries which had been listed on the TSE — SMEJ, Sony Chemicals Corporation (currently Dexerials Corporation), and Sony Precision Technology Inc. (which was merged into Sony EMCS Corporation) — became wholly-owned subsidiaries of Sony Group Corporation.
In January 2000, acquisition transactions by way of a share exchange were completed such that three subsidiaries which had been listed on the TSE — SMEJ, Sony Chemicals Corporation (currently Dexerials Corporation), and Sony Precision Technology Inc. (currently Sony Global Manufacturing & Operations Corporation) — became wholly-owned subsidiaries of Sony Group Corporation.
U.S.A. 100.0 Sony Electronics Inc. U.S.A. 100.0 Sony Europe B.V. U.K. 100.0 Sony Interactive Entertainment Europe Ltd. U.K. 100.0 Sony Global Treasury Services Plc U.K. 100.0 Sony Overseas Holding B.V. Netherlands 100.0 Sony (China) Limited China 100.0 Sony EMCS (Malaysia) Sdn. Bhd. Malaysia 100.0 Sony Electronics (Singapore) Pte. Ltd. Singapore 100.0 - 29 - Table of Contents D.
U.S.A. 100.0 CPT Holdings, Inc. U.S.A. 100.0 Sony Electronics Inc. U.S.A. 100.0 Sony Europe B.V. U.K. 100.0 Sony Interactive Entertainment Europe Ltd. U.K. 100.0 Sony Global Treasury Services Plc U.K. 100.0 Sony Overseas Holding B.V. Netherlands 100.0 Sony (China) Limited China 100.0 Sony EMCS (Malaysia) Sdn. Bhd. Malaysia 100.0 Sony Electronics (Singapore) Pte. Ltd. Singapore 100.0 D.
Media Networks: “Media Networks” includes the operation of television and digital networks worldwide. SPE’s television networks around the world include SPNI, which operates television networks in India, and Game Show Network, LLC, which operates a U.S.-based network delivered on cable, satellite and other distribution platforms.
Media Networks: “Media Networks” includes the operation of television networks and direct-to-consumer (“DTC”) streaming services worldwide. SPE’s television networks around the world include SPNI, which operates television networks in India, and Game Show Network, LLC, which operates a U.S.-based network delivered on cable, satellite and other distribution platforms.
Sales and Distribution G&NS, EP&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.
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.
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. - 20 - Table of Contents In the fiscal year ended March 31, 2022, Sony invested approximately 255.8 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, 2023, Sony invested approximately 381.1 billion yen in the I&SS segment.
SMEJ creates artwork and produces packaged home entertainment products including music and games. It also organizes various events in Japan through Sony Music Communications Inc. and its affiliates. In addition, SMEJ produces, markets and distributes animation products and game applications based on animation titles under the Aniplex name.
It also organizes various events in Japan through Sony Music Communications Inc. and its affiliates. In addition, SMEJ produces, markets and distributes animation products and game applications based on animation titles under the Aniplex name.
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, 2023, except as described above in connection with the wind-down of its representative office in Iran.
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 sanctions against Iran continue to evolve, Sony will continue to assess whether and to what extent such sanctions may affect Sony’s business activities, which Sony intends to conduct in accordance with applicable laws and regulations.
Nevertheless, Sony continues to monitor developments in this area as sanctions against Iran continue to evolve, and assess whether and to what extent such sanctions may affect Sony’s business activities, which Sony intends to conduct in accordance with applicable laws and regulations.
China: Sony markets products and services in these segments through Sony (China) Limited, Sony Corporation of Hong Kong Limited and other wholly-owned subsidiaries in China. Asia-Pacific: In Asia-Pacific, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony India Private Limited, Sony Electronics of Korea Corporation, Sony Taiwan Limited and Sony Electronics Vietnam.
Asia-Pacific: In Asia-Pacific, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony India Private Limited, Sony Electronics of Korea Corporation, Sony Taiwan Limited and Sony Electronics Vietnam.
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.
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.
In the course of liquidation, Sony engages in certain incidental transactions (for example, permits, taxes, and similar matters incidental to the wind-down of the office in Iran) with Iranian government-owned entities. No material revenues or profits are associated with these transactions with the Iranian government-owned entities.
In the course of liquidation, Sony engages in certain incidental transactions (for example, permits, taxes, and similar matters incidental to the wind-down of the office in Iran) with Iranian government-owned entities.
Regarding raw materials, the market price of resin and sheet steel, which are widely used in mechanical parts, electronic parts and components, may also fluctuate and impact the cost of those parts and components. After-Sales Service Sony provides repair and servicing functions in the areas where its G&NS, EP&S and I&SS products are sold.
Regarding raw materials, the market price of resin, sheet steel and copper, which are widely used in mechanical parts, electronic parts and components, may also fluctuate because of market factors such as the balance of supply and demand, and such fluctuations may impact the cost of those parts and components. - 24 - Table of Contents After-Sales Service Sony provides repair and servicing functions in the areas where its G&NS, ET&S and I&SS products are sold.
In December 2005, Sony Communication Network Corporation, a subsidiary of Sony Group Corporation, was listed on the Mother’s market of the TSE, and was later listed on the First Section of the TSE in January 2008. Sony Communication Network Corporation was renamed So-net Corporation (“So-net”) in July 2013.
In December 2005, Sony Communication Network Corporation, a subsidiary of Sony Group Corporation, was listed on the Mother’s market of the TSE, and was later listed on the First Section of the TSE in January 2008. It changed its name to So-net Entertainment Corporation in October 2006, and changed its name again to So-net Corporation (“So-net”) in July 2013.
Sony is aware that certain transactions during the fiscal year ended March 31, 2022, as described below, may be disclosable pursuant to Section 13(r) of the Exchange Act. - 28 - Table of Contents The information below is to the best of Sony’s knowledge, and in particular Sony may not be aware of all potentially reportable sales by third-party-owned dealers and distributors. • Sony’s representative office in Tehran, Iran, which was established in 1992, has been closed and has been under liquidation processes since before the beginning of the fiscal year ended March 31, 2014.
The information below is to the best of Sony’s knowledge, and in particular Sony may not be aware of all potentially reportable sales by third-party-owned dealers and distributors. • Sony’s representative office in Tehran, Iran, which was established in 1992, has been closed and has been under liquidation processes since before the beginning of the fiscal year ended March 31, 2014.
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 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 September 2017, Sony transferred its battery businesses to the Murata Manufacturing Co., Ltd. Group. In April 2019, SVP and SVS merged to become Sony Home Entertainment & Sound Products Inc. (“SHES”). In April 2020, Sony established Sony Electronics Corporation, an intermediate holding company encompassing the electronics products and solutions businesses.
In April 2019, Sony Visual Products Inc. and SVS merged to become Sony Home Entertainment & Sound Products Inc. (“SHES”). In April 2020, Sony established Sony Electronics Corporation, an intermediate holding company encompassing the electronics products and solutions businesses.
AEGON Sony Life changed its trade name to Sony Life With Insurance Co., Ltd. (“Sony Life With”) on April 1, 2020. Furthermore, on April 1, 2021, Sony Life undertook an absorption-type merger with Sony Life With, with Sony Life as the surviving company. Sony Assurance has conducted a non-life insurance business in Japan since October 1999.
(“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.
Europe: In Europe, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony Europe B.V., which is headquartered in the United Kingdom and has branches in European countries, and Sony Electronics JSC in Russia.
Europe: In Europe, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony Europe B.V., which is headquartered in the United Kingdom and has branches in European countries. China: Sony markets products and services in these segments through Sony (China) Limited, Sony Corporation of Hong Kong Limited and other wholly-owned subsidiaries in China.
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. C. Organizational Structure The following table sets forth the significant subsidiaries owned, directly or indirectly, by Sony Group Corporation.
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.
Fiscal year ended March 31 2021 2022 (Yen in millions) Japan 2,965,936 2,764,321 United States 2,147,686 2,766,021 Europe 1,817,854 1,870,091 China 762,766 771,006 Asia-Pacific 861,623 1,149,261 Other Areas 442,796 600,813 Total 8,998,661 9,921,513 - 25 - Table of Contents 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 (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.
In the I&SS segment, Sony puts significant effort into keeping Sony’s strong competitive position by investing in R&D and production capacity, while also trying to avoid overinvesting and increasing fixed costs by carefully monitoring customer demand, market trends and demand for end-user products. - 26 - Table of Contents Music Success in the music industry is dependent to a large extent upon the artistic and creative abilities of artists, producers and employees and is subject to the vagaries of public taste.
In the I&SS segment, Sony puts significant effort into keeping Sony’s strong competitive position by investing in R&D and production capacity, while also trying to avoid overinvesting and increasing fixed costs by carefully monitoring customer demand, market trends and demand for end-user products.
In April 2016, the imaging and sensing solutions business was split out and began operations as Sony Semiconductor Solutions Corporation (“SSS”). In April 2017, the imaging products and solutions business was split out and began operations as Sony Imaging Products & Solutions Inc. (“SIPS”), which completed the sequential separation of Sony’s business units into distinct subsidiaries.
In April 2017, the imaging products and solutions business was split out and began operations as Sony Imaging Products & Solutions Inc. (“SIPS”), which completed the sequential separation of Sony’s business units into distinct subsidiaries. In September 2017, Sony transferred its battery businesses to the Murata Manufacturing Co., Ltd. Group.
When parts, components and raw materials become scarce, it not only causes production costs to rise but also may affect production. 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.
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.
Sony Life and Sony Assurance have maintained a high solvency margin ratio, relative to the Japanese domestic minimum solvency margin ratio requirements. Sony Bank has maintained a sufficient capital adequacy ratio relative to the Japanese domestic criteria.
Sony Bank has maintained a sufficient capital adequacy ratio relative to the Japanese domestic criteria.
Sales of such products and services are particularly seasonal and vary significantly with the timing of new product introductions and the economic conditions of each country.
In some regions, certain products and services are sold directly to local distributors by Sony Group Corporation. Sales of such products and services are particularly seasonal and vary significantly with the timing of new product introductions and the economic conditions of each country.
Financial Services SFGI conducts insurance, banking and other operations primarily through Sony Life, a Japanese life insurance company, Sony Assurance, a Japanese non-life insurance company, and Sony Bank, a Japanese internet-based bank, which are all wholly-owned by SFGI. - 22 - Table of Contents All Other All Other consists of various operating activities, including the disc manufacturing business outside of Japan, and the recording media and storage media businesses.
Financial Services SFGI conducts insurance, banking and other operations primarily through Sony Life, a Japanese life insurance company, Sony Assurance, a Japanese non-life insurance company, and Sony Bank, a Japanese internet-based bank, which are all wholly-owned by SFGI.
SMEJ conducts business in Japan under “Sony Music Records,” “Epic Records Japan,” “SME Records,” “Ki/oon Music,” “Sony Music Associated Records” and other labels. 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.
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.
Property, Plant and Equipment Sony has a number of offices, plants and warehouses throughout the world. Most of the buildings and land in/on which such offices, plants and warehouses are located are owned by Sony.
Property, Plant and Equipment Sony has a number of offices, plants and warehouses throughout the world.
In July 2014, pursuant to a separation of Sony’s businesses into distinct subsidiaries, the television business was split out and began operations as Sony Visual Products Inc. (“SVP”). In October 2015, the video and sound business was split out and began operations as Sony Video & Sound Products Inc. (“SVS”).
In July 2014, Sony Group Corporation sold its personal computer (“PC”) business operated under the VAIO brand to Japan Industrial Partners, Inc. In July 2014, pursuant to a separation of Sony’s businesses into distinct subsidiaries, the television business was split out and began operations as Sony Visual Products Inc.
Other Areas: In overseas areas other than the U.S., Europe, China and Asia-Pacific, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony Brasil Ltda., Sony Middle East & Africa FZE in the United Arab Emirates and Sony de Mexico S.A.de C.V. - 23 - Table of Contents Along with certain of its global corporate functions in Japan, Sony Mobile has sales and marketing operations in many major regions of the world, as well as a major manufacturing site in Thailand and product development sites in Japan and Sweden.
Other Areas: In overseas areas other than the U.S., Europe, China and Asia-Pacific, Sony’s products and services in these segments are marketed through sales subsidiaries including Sony Brasil Ltda., Sony Middle East & Africa FZE in the United Arab Emirates and Sony de Mexico S.A.de C.V.
AEGON Sony Life and SA Re began operations in Japan in December 2009 and in Bermuda in January 2010, respectively. 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.
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.
Sony Bank has focused on providing retail asset management and mortgage services for individuals, and faces significant competition in Japan’s retail financial services market.
Sony Bank has focused on providing retail asset management and mortgage services for individuals, and faces significant competition in Japan’s retail financial services market. Sony Bank competes with traditional banking institutions, regional banks, trust banks, non-bank companies, and newer financial groups providing online full-services of bank and brokerage in Japan.
In April 2022, due to a restructuring of the segments of the TSE, Sony Group Corporation moved from the First Section to the Prime Market of the TSE. Sony Group Corporation’s registered office is located at 7-1, Konan 1-chome, Minato-ku, Tokyo 108-0075, Japan, telephone +81-3-6748-2111. Its website is https://www.sony.com/en/ .
(“Sony Honda Mobility”), a joint venture in the mobility field between Sony Group Corporation and Honda Motor Co., Ltd., was established in Japan. Sony’s stake in Sony Honda Mobility is 50%. Sony Group Corporation’s registered office is located at 7-1, Konan 1-chome, Minato-ku, Tokyo 108-0075, Japan, telephone +81-3-6748-2111. Its website is https://www.sony.com/en/ .
(“SNC”) in July 2016. - 19 - Table of Contents In June 2012, an investor group including Sony Corporation of America (“SCA”) established DH Publishing, L.P. (“EMI”) to own and manage EMI Music Publishing, which it then acquired.
In June 2012, an investor group including Sony Corporation of America (“SCA”) established DH Publishing, L.P. (“EMI”) to own and manage EMI Music Publishing, which it then acquired. This acquisition resulted in Nile Acquisition LLC (“Nile”), of which SCA owned 74.9% and the Estate of Michael Jackson (the “Estate”) owned 25.1%, acquiring approximately 40% of the equity interest in EMI.
Sony Mobile brings its products to market through direct and indirect distribution channels, such as third-party cellular network carriers and retailers, as well as through its website. Music SME and SMEJ develop, produce, market, and distribute recorded music in various commercial formats. SME and its affiliates conduct business globally under “Columbia Records,” “Epic Records,” “RCA Records” and other labels.
Music SME and SMEJ develop, produce, market, and distribute recorded music in various commercial formats. SME and its affiliates conduct business globally under “Columbia Records,” “Epic Records,” “RCA Records” and other labels. SMEJ conducts business in Japan under “Sony Music Records,” “Epic Records Japan,” “SME Records,” “Ki/oon Music,” “Sony Music Associated Records” and other labels.
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. In January 2021, Nile changed its name to Sony Music Publishing LLC (“SMP”). SMP encompasses both the former Sony/ATV and EMI. In April 2013, Sony Olympus Medical Solutions Inc.
In January 2021, Nile changed its name to Sony Music Publishing LLC (“SMP”). SMP encompasses both the former Sony/ATV and EMI. In April 2013, Sony Olympus Medical Solutions Inc. (“SOMED”), a medical business venture between Sony Group Corporation and Olympus Corporation, was established in Japan. Sony’s stake in SOMED is 51%.
Electronics Products & Solutions (EP&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. 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.
These subsidiaries then sell those products to unaffiliated local distributors and dealers or through direct sales, such as through the internet. In some regions, certain products and services are sold directly to local distributors by Sony Group Corporation.
These subsidiaries then sell those products to unaffiliated local distributors and dealers or through direct sales, such as through the internet. Sony Corporation brings its mobile products to market through direct and indirect channels, such as third-party cellular network carriers and retailers, as well as through its own website.
These items are purchased from various suppliers around the world. Sony has a general policy of maintaining multiple suppliers for important parts and components. In the fiscal year ended March 31, 2022, Sony continued to optimize the number of its suppliers to achieve efficiencies and to minimize procurement risks when possible.
These items are purchased from various suppliers around the world. Sony has a general policy of maintaining multiple suppliers for important parts and components. When parts, components and raw materials become scarce, it not only causes production costs to rise but also may affect production.
This acquisition resulted in Nile Acquisition LLC (“Nile”), of which SCA owned 74.9% and the Estate of Michael Jackson (the “Estate”) owned 25.1%, acquiring approximately 40% of the equity interest in EMI. 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 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.
Removed
(“SOMED”), a medical business venture between Sony Group Corporation and Olympus Corporation was established in Japan. Sony’s stake in SOMED is 51%. In July 2014, Sony Group Corporation sold its personal computer (“PC”) business operated under the VAIO brand to Japan Industrial Partners, Inc.
Added
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”).
Removed
This investment included approximately 237.1 billion yen to increase image sensor production capacity. B. Business Overview Due to organizational changes as of April 1, 2021, from the first quarter of the fiscal year ended March 31, 2022, Sony transferred some of the businesses and functions previously included within All Other and Corporate and elimination to the EP&S segment.
Added
In April 2022, due to a restructuring of the segments of the TSE, Sony Group Corporation moved from the First Section to the Prime Market of the TSE. In July 2022, Sony Interactive Entertainment LLC acquired Bungie, an independent videogame developer in the United States. In September 2022, Sony Honda Mobility Inc.
Removed
In connection with these organizational changes, sales and operating income (loss) of each segment for the fiscal year ended March 31, 2021 are presented to conform to the organizational structure for the fiscal year ended March 31, 2022.
Added
This investment included approximately 355.9 billion yen to increase image sensor production capacity. - 19 - Table of Contents B. Business Overview The former Electronics Products & Solutions segment was renamed the Entertainment, Technology & Services (ET&S) segment effective from April 2022. This change did not result in any reclassification of businesses across segments.
Removed
Digital networks include SonyLIV, a general entertainment streaming service in India, in addition to Crunchyroll, a streaming service primarily focused on anime content, and Pure Flix, a streaming service primarily focused on faith and family-based content, both primarily in North America.
Added
All Other All Other consists of various operating activities, including the disc manufacturing business outside of Japan, and the recording media and storage media businesses.
Removed
In addition, certain costs related to the after-sales services of the PC business, which was sold in 2014, remain in All Other.
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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.
Removed
Nevertheless, Sony has continued to monitor developments in this area, especially in the light of the United States’ decision that was implemented in its entirety on November 5, 2018 to cease its participation in the Joint Comprehensive Plan of Action of July 14, 2015, among the United States, the United Kingdom, China, France, Russia, Germany, the European Union and Iran and re-impose certain secondary sanctions (i.e., laws and regulations that threaten to impose U.S. economic sanctions on non-U.S. companies engaging in specified transactions with Iran outside U.S. jurisdiction).

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

126 edited+78 added−102 removed71 unchanged
Biggest changeThe “consolidated” column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities. - 42 - Table of Contents Condensed Statements of Financial Position Yen in millions Financial Services Sony without Financial Services Consolidated April 1, 2020 March 31, 2021 March 31, 2022 April 1, 2020 March 31, 2021 March 31, 2022 April 1, 2020 March 31, 2021 March 31, 2022 ASSETS Current assets: Cash and cash equivalents *1 ¥ 550,039 ¥ 497,218 ¥ 889,140 ¥ 962,484 ¥ 1,289,764 ¥ 1,160,496 ¥ 1,512,523 ¥ 1,786,982 ¥ 2,049,636 Investments and advances in the Financial Services segment *2 327,092 411,982 360,673 — — — 327,092 411,982 360,673 Trade and other receivables, and contract assets 115,592 119,791 169,929 1,086,457 1,261,321 1,478,620 1,194,334 1,365,493 1,628,521 Inventories — — — 559,779 636,668 874,007 559,779 636,668 874,007 Other financial assets 79,721 73,349 81,174 55,762 44,498 68,124 135,482 117,682 149,301 Other current assets 51,765 51,147 72,441 390,915 357,582 450,953 441,974 396,210 473,070 Total current assets 1,124,209 1,153,487 1,573,357 3,055,397 3,589,833 4,032,200 4,171,184 4,715,017 5,535,208 Non-current assets: Investments accounted for using the equity method — — — 204,291 225,086 268,513 204,291 225,086 268,513 Investments and advances in the Financial Services segment *2 16,352,285 17,296,546 18,445,088 — — — 16,352,285 17,296,546 18,445,088 Investments in Financial Services, at cost — — — 153,968 550,483 550,483 — — — Property, plant and equipment 18,256 19,260 18,010 899,185 971,336 1,095,241 917,198 990,541 1,113,213 Right-of-use assets 57,892 65,775 73,774 315,431 292,262 339,658 373,282 358,034 413,430 Goodwill and intangible assets, including content assets 62,660 66,133 72,578 1,998,413 2,113,578 2,672,466 2,061,073 2,179,711 2,745,044 Deferred insurance acquisition costs 187,904 623,986 676,526 — — — 187,904 623,986 676,526 Deferred tax assets 8,129 — — 202,217 309,341 332,330 210,333 215,669 298,589 Other financial assets 34,319 28,043 37,037 291,373 671,683 663,233 321,721 695,764 696,306 Other non-current assets 87,933 86,287 77,657 155,643 195,713 284,834 167,795 207,489 289,050 Total non-current assets 16,809,378 18,186,030 19,400,670 4,220,521 5,329,482 6,206,758 20,795,882 22,792,826 24,945,759 Total assets ¥ 17,933,587 ¥ 19,339,517 ¥ 20,974,027 ¥ 7,275,918 ¥ 8,919,315 ¥ 10,238,958 ¥ 24,967,066 ¥ 27,507,843 ¥ 30,480,967 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings *3 ¥ 768,100 ¥ 1,160,896 ¥ 1,964,776 ¥ 154,884 ¥ 246,257 ¥ 183,187 ¥ 922,968 ¥ 1,407,153 ¥ 2,147,962 Trade and other payables 43,975 80,189 118,921 1,273,946 1,531,502 1,744,011 1,310,536 1,596,563 1,843,242 Deposits from customers in the banking business 2,347,387 2,682,156 2,886,361 — — — 2,347,387 2,682,156 2,886,361 Income taxes payables 22,509 5,407 4,444 62,837 79,024 101,648 85,346 84,431 106,092 Participation and residual liabilities in the Pictures segment — — — 163,007 161,433 190,162 163,007 161,433 190,162 Other financial liabilities 44,668 29,106 68,793 11,484 25,235 29,050 56,152 54,341 97,843 Other current liabilities 179,652 192,728 242,937 1,085,330 1,187,975 1,296,205 1,263,944 1,367,527 1,488,488 Total current liabilities 3,406,291 4,150,482 5,286,232 2,751,488 3,231,426 3,544,263 6,149,340 7,353,604 8,760,150 Non-current liabilities: Long-term debt 276,409 361,106 470,498 662,644 692,531 733,148 939,030 1,053,636 1,203,646 Defined benefit liabilities 34,856 35,293 37,167 294,765 231,929 217,381 329,621 267,222 254,548 Deferred tax liabilities 879,683 802,830 634,576 176,839 122,489 110,715 1,041,156 816,587 696,492 Future insurance policy benefits and other *4 6,519,577 6,614,585 7,039,034 — — — 6,519,577 6,614,585 7,039,034 Policyholders’ account in the life insurance business 3,640,010 4,328,894 4,791,295 — — — 3,640,010 4,328,894 4,791,295 Participation and residual liabilities in the Pictures segment — — — 119,702 116,537 220,113 119,702 116,537 220,113 Other financial liabilities 115,949 109,537 128,208 33,399 32,446 86,391 146,834 139,417 211,959 Other non-current liabilities 4,217 5,309 5,864 106,693 109,808 121,558 87,320 93,022 106,481 Total non-current liabilities 11,470,701 12,257,554 13,106,642 1,394,042 1,305,740 1,489,306 12,823,250 13,429,900 14,523,568 Total liabilities 14,876,992 16,408,036 18,392,874 4,145,530 4,537,166 5,033,569 18,972,590 20,783,504 23,283,718 Equity: Stockholders’ equity of Financial Services 3,054,361 2,928,525 2,577,705 — — — — — — Stockholders’ equity of Sony without Financial Services — — — 3,084,820 4,341,109 5,156,059 — — — Sony Group Corporation’s stockholders’ equity — — — — — — 4,874,438 6,680,343 7,144,471 Noncontrolling interests 2,234 2,956 3,448 45,568 41,040 49,330 1,120,038 43,996 52,778 Total equity 3,056,595 2,931,481 2,581,153 3,130,388 4,382,149 5,205,389 5,994,476 6,724,339 7,197,249 Total liabilities and equity ¥ 17,933,587 ¥ 19,339,517 ¥ 20,974,027 ¥ 7,275,918 ¥ 8,919,315 ¥ 10,238,958 ¥ 24,967,066 ¥ 27,507,843 ¥ 30,480,967 *1 Refer to “Cash Flows” below for details regarding the year-on-year increase in Cash and cash equivalents as of March 31, 2022 in all segments excluding 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, 2021 and March 31, 2022, respectively. - 43 - Table of Contents *3 Short-term borrowings as of March 31, 2022 in the Financial Services segment increased year-on-year due to an increase in short-term borrowings mainly at Sony Life. *4 Future insurance policy benefits and other as of March 31, 2022 in the Financial Services segment increased year-on-year due to an increase in future insurance policy benefits mainly at Sony Life.
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.
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 increase in the amounts recorded for identifiable liabilities assumed.
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 liability is generally equal to the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balances. Liabilities for policyholders’ account in the life insurance business include the liabilities related to the variable annuities and variable life insurance contracts with minimum guarantee benefits.
This liability is generally equal to the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balances. Liabilities for policyholders’ account in the life insurance business include the liabilities related to the individual variable annuities and variable life insurance contracts with minimum guarantee benefits.
In addition, Sony’s subsidiaries in the Financial Services segment are subject to the Japanese Insurance Business Act and Banking Act, which require insurance and business companies to maintain their financial credibility and to secure protection for policyholders and depositors in view of the public nature of insurance and banking services.
In addition, Sony’s subsidiaries in the Financial Services segment are subject to the Insurance Business Act and the Banking Act, which require insurance and banking business companies to maintain their financial credibility and to secure protection for policyholders and depositors in view of the public nature of insurance and banking services.
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 multicurrency 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 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.
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 of Sony Life discussed in the Financial Services segment differ from the results that SFGI and Sony Life disclose separately on a Japanese statutory basis.
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.
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 Arrangements Sony has certain off-balance sheet arrangements 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: 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.
Estimation of ultimate revenue in the Pictures segment An aspect of film accounting that requires the exercise of judgment relates to the process of estimating the total revenues to be received throughout a film’s life cycle.
Estimation of ultimate revenue in the Pictures segment An aspect of film accounting that requires the exercise of management’s judgment relates to the process of estimating the total revenues to be received throughout a film’s life cycle.
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, 2022, Sony held its Corporate Strategy Meeting for the fiscal year ending March 31, 2023.
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.
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, EP&S and 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 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%.
There were no amounts outstanding under the CP programs as of March 31, 2022. 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, 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.
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, 2022. 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, 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%.
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, is Adjusted EBITDA*.
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*.
In the EP&S segment, yen appreciation against the U.S. dollar has a positive impact on operating income, mainly due to a high proportion of manufacturing and other costs for certain key products being incurred in U.S. dollars.
In the ET&S segment, yen appreciation against the U.S. dollar has a positive impact on operating income, mainly due to a high proportion of manufacturing and other costs for certain key products being incurred in U.S. dollars.
Sony Life, Sony Assurance and Sony Bank maintain a sufficient cash balance and secure sufficient - 46 - Table of Contents 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 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.
Meanwhile, a large portion of sales for certain key products is in emerging markets, resulting in yen appreciation against the currencies of emerging markets having a negative impact on operating profit in the EP&S segment.
Meanwhile, a large portion of sales for certain key products is in emerging markets, resulting in yen appreciation against the currencies of emerging markets having a negative impact on operating profit in the ET&S segment.
Cost of Sales, Selling, General and Administrative Expenses and Other Operating (Income) Expense, net “Sales” in the analysis of the ratio of “cost of sales” to sales, the ratio of “R&D costs” to sales, and the ratio of “selling, general and administrative expenses” (“SGA expenses”) to sales refers only to the net sales portions - 31 - Table of Contents of consolidated sales (which excludes financial services revenue).
Cost of Sales, Selling, General and Administrative Expenses and Other Operating (Income) Expense, net “Sales” in the analysis of the ratio of “cost of sales” to sales, the ratio of “R&D costs” to sales, and the ratio of “selling, general and administrative expenses” (“SGA expenses”) to sales refers only to the net sales portions of consolidated sales (which excludes financial services revenue).
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, 2022 is included below: • The post-tax discount rates ranged from 3.2% 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, 2023 is included below: • The post-tax discount rates ranged from 2.6% to 15.0%.
Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment (including noncontrolling interests). The figures shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of each.
Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment. The figures shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of each.
Funding requirements that arise from maintaining liquidity are principally covered by cash flow from operating and investing activities (including asset sales) and by the available cash balance; however, Sony also raises funds as needed from financial and capital markets through means such as corporate bonds, commercial paper (“CP”) and bank loans.
Funding requirements that arise from maintaining liquidity are principally covered by cash flow from operating and investing activities (including asset sales) and by the available cash balance; however, Sony also raises funds as needed from financial and capital markets through means such as corporate bonds, CP and bank loans.
Information on Operations Separating Out the Financial Services segment The following schedules show unaudited condensed statements of income for the Financial Services segment and all other segments excluding the Financial Services segment. These presentations are not in accordance with IFRS, which is used by Sony to prepare its consolidated financial statements.
Information on Operations Separating Out the Financial Services segment The following schedules show unaudited condensed statements of income for the Financial Services segment and all other segments excluding the Financial Services segment. These presentations are not in accordance with International Financial Reporting Standards (“IFRS”), which is used by Sony to prepare its consolidated financial statements.
The impact of foreign exchange rate fluctuations on operating income (loss) is calculated by subtracting from the impact on sales the impact on cost of sales and selling, general and administrative expenses calculated by applying the same major transactional currencies calculation process to cost of sales and selling, general and administrative expenses as for the impact on sales.
The impact of foreign exchange rate fluctuations on operating income (loss) is calculated by subtracting from the impact on sales the impact on cost of sales and SGA expenses calculated by applying the same major transactional currencies calculation process to cost of sales and SGA expenses as for the impact on sales.
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 6.0x to 11.0x and the revenue multiple was 1.5x to 2.0x.
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.
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 1,111.6 billion yen in total for Sony Group Corporation, SGTS and SCC as of March 31, 2022.
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.
Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results and cash flows in accordance with IFRS. ** The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the fiscal year ended March 31, 2022.
Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results in accordance with IFRS. - 57 - Table of Contents ** The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the fiscal year ended March 31, 2023.
The growth rates beyond the mid-range plan period for the CGUs in the Music segment ranged from 1.0% to 2.5%, and in the Pictures segment ranged from (5.0%) to 16.0%.
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 21.0%.
A one yen appreciation against the euro was estimated to decrease sales in these segments by approximately 10.0 billion yen, with a corresponding decrease in operating income of approximately 5.5 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 11.1 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.
Future insurance policy benefits Liabilities for future insurance policy benefits are primarily comprised of the present value of estimated future payments to policyholders. These liabilities are computed by the net level premium method based upon the assumptions as to future investment yield, morbidity rates, mortality rates, lapse rates and other factors. These assumptions are reviewed on a periodic basis.
Future insurance policy benefits Liabilities for future insurance policy benefits are primarily comprised of the present value of estimated future payments to policyholders. These liabilities are computed by the net level premium method based upon the - 60 - Table of Contents assumptions as to future investment yield, morbidity rates, mortality rates, lapse rates and other factors.
In the Pictures segment, sales increased 65% year-on-year to 1 trillion 238.9 billion yen, while sales increased approximately 55% 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 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.
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, 2022, cost of sales increased 779.9 billion yen year-on-year to 5 trillion 845.8 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, 2023, cost of sales increased 1 trillion 328.9 billion yen year-on-year to 7 trillion 174.7 billion yen.
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. - 55 - Table of Contents While a film is being produced and the related costs are being capitalized, it is necessary for management to estimate the ultimate revenue, less additional costs to be incurred, including exploitation costs which are expensed as incurred, in order to determine whether the value of a film has been impaired and thus requires an immediate write-off of unrecoverable film costs.
While a film is being produced and the related costs are being capitalized, it is necessary for management to estimate the ultimate revenue, less additional costs to be incurred, including exploitation costs which are expensed as incurred, in order to determine whether the value of a film has been impaired and thus requires an immediate write-off of unrecoverable film costs.
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.
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.
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, 2022 were 711.84 yen and 705.16 yen, respectively, compared with 836.75 yen and 823.77 yen, respectively, for the fiscal year ended March 31, 2021. 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, 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.
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.
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.
Refer to Note 15 of the consolidated financial statements. * Note: In this section, the impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s periodic weighted average exchange rates for the previous fiscal year from the current fiscal year to the major transactional currencies in which the sales are denominated.
The impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s periodic weighted average exchange rate for the previous fiscal year from the current fiscal year to the major transactional currencies in which the sales are denominated.
This increase was mainly due to the recording of 5.1 billion yen in the share of profit of the investment in M3, Inc. (“M3”) related to a gain on a change in M3’s equity interest in an affiliated company, resulting from the issuance of new shares in connection with the affiliated company’s public listing.
This decrease in the share of profit of the investment in M3 was mainly due to the absence of the recording of 5.1 billion yen in the share of profit of the investment in M3 related to a gain on a change in M3’s equity interest in an affiliated company in the fiscal year ended March 31, 2022, resulting from the issuance of new shares in connection with the affiliated company’s public listing.
This decrease was primarily due to a larger year-on-year increase in inventories and content assets, a smaller increase in trade payables and an increase in payments of income taxes, partially offset by the positive impact of a year-on-year increase in income before income tax 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 (other than the Financial Services segment)).
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).
Corporate R&D carries out various research and development activities in collaboration with multiple R&D organizations located in Japan, China, India, Europe and the United States, utilizing the different characteristics - 47 - Table of Contents and strengths of each area.
The Sony Group’s research and development organization (“Corporate R&D”) carries out various R&D activities in collaboration with multiple R&D organizations located in Japan, Europe, the United States, India and China, utilizing the different characteristics and strengths of each area.
During the fiscal year ended March 31, 2022, Sony estimated that a one yen appreciation against the U.S. dollar would have decreased sales in the G&NS, EP&S and I&SS segments by approximately 26.8 billion yen, with a corresponding decrease in operating income of approximately 1.7 billion yen.
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.
Business Environment and Strategy The operating performance of the Financial Services segment for the fiscal year ended March 31, 2022 reflected conditions in the Japanese economy and bond market. As in the previous fiscal year, the Japanese economy continued to be significantly impacted by the COVID-19 pandemic.
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.
Sony has a total, translated into yen, of 611.4 billion yen in unused committed lines of credit, as of March 31, 2022.
Sony has a total, translated into yen, of 641.5 billion yen in unused committed lines of credit, as of March 31, 2023.
Operating income for the current fiscal year included a one-time loss of 16.8 billion yen recorded at a subsidiary of Sony Life within Financial Services expenses and a settlement gain of 5.5 billion yen in connection with the termination of the defined benefit pension plan at certain U.S. subsidiaries, mainly within Corporate and elimination.
Operating income for the previous fiscal year also included a loss of 16.8 billion yen recorded due to an unauthorized withdrawal of funds at a subsidiary of Sony Life and a settlement gain of 5.5 billion yen in connection with the termination of the defined benefit pension plan at certain U.S. subsidiaries, mainly within Corporate and elimination.
This increase in sales was mainly due to the impact of foreign exchange rates as well as an increase in sales of hardware, partially offset primarily by a decrease in software sales, mainly from non-first-party titles including add-on content. Operating income was 346.1 billion yen, essentially flat year-on-year.
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.
Fiscal year ended March 31 2022 (Yen in billions) Net income attributable to Sony Group Corporation’s stockholders 882.2 Net income attributable to noncontrolling interests 6.2 Income taxes 229.1 Interest expenses, net, recorded in Financial income and Financial expense 7.6 Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense (66.2 ) Depreciation and amortization expense excluding amortization for film costs and broadcasting rights included in Content assets as well as deferred insurance acquisition costs 470.4 Profit and loss amount that Sony deems to be non-recurring*** (63.8 ) Adjusted EBITDA 1,597.9 *** The table below shows the details of the profit and loss amount that Sony deems to be non-recurring for the fiscal year ended March 31, 2022.
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.
Investing Activities: During the current fiscal year ended March 31, 2022, Sony used 728.8 billion yen of net cash in investing activities, an increase of 164.9 billion yen year-on-year. For all segments excluding the Financial Services segment, there was a net cash outflow of 711.1 billion yen, an increase of 169.0 billion yen year-on-year.
Investing Activities: During the current fiscal year ended March 31, 2023, Sony used 1 trillion 52.7 billion yen of net cash in investing activities, an increase of 323.9 billion yen year-on-year. For all segments excluding the Financial Services segment, there was a net cash outflow of 1 trillion 32.0 billion yen, an increase of 320.9 billion yen year-on-year.
This was mainly due to significant increases in sales in the Pictures, EP&S and Music segments. A further breakdown of sales figures is presented under “Operating Performance by Business Segment” below.
This significant increase was mainly due to significant increases in sales in the G&NS, I&SS, Music and Pictures segments as well as an increase in sales in the ET&S segment. A further breakdown of sales figures is presented under “Operating Performance by Business Segment” below.
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, 2022, sales increased 485.9 billion yen, a 65% increase year-on-year (a 55% increase on a U.S. dollar basis), to 1 trillion 238.9 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, 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.
Operating Results Operating Performance Fiscal year ended March 31 2021 2022 (Yen in billions) Sales and financial services revenue 8,998.7 9,921.5 Operating income 955.3 1,202.3 Income before income taxes 998.0 1,117.5 Net income attributable to Sony Group Corporation’s stockholders 1,029.6 882.2 Sales For the fiscal year ended March 31, 2022, sales increased 922.9 billion yen compared to the fiscal year ended March 31, 2021 (“year-on-year”) to 9 trillion 921.5 billion yen.
Fiscal year ended March 31 2022 2023 (Yen in billions) Sales and financial services revenue 9,921.5 11,539.8 Operating income 1,202.3 1,208.2 Income before income taxes 1,117.5 1,180.3 Net income attributable to Sony Group Corporation’s stockholders 882.2 937.1 Sales For the fiscal year ended March 31, 2023, sales increased 1 trillion 618.3 billion yen compared to the fiscal year ended March 31, 2022 (“year-on-year”) to 11 trillion 539.8 billion yen.
A hypothetical reduction in earnings multiple by 1.0x and revenue multiple by 0.25x, respectively, holding all other assumptions constant, would not have resulted in an impairment.
A hypothetical reduction in earnings multiple by 1.0x and revenue multiple by 0.25x, respectively, holding all other assumptions constant, would not have resulted in a significant impairment. Management believes that the assumptions used in the impairment tests are reasonable.
Additionally, in Motion Pictures and Television Productions, efforts towards cooperation within the Sony Group have continued, and, following the theatrical release of Uncharted in February 2022, Sony plans to further expand its films and television shows based on game IP.
Additionally, in Motion Pictures and Television Productions, efforts towards collaboration within the Sony Group have continued, and, following the success of the Uncharted film in 2022 and the TV series The Last of Us in 2023, Sony plans to further expand its films and television shows based on PlayStation game IP.
The Financial Services segment had a net cash inflow of 459.7 billion yen, an increase of 449.8 billion yen year-on-year. This increase was mainly due to a larger year-on-year increase in borrowings in the life insurance business and the banking business and a smaller year-on-year increase in investments and advances in the financial services business.
The Financial Services segment had a net cash outflow of 56.3 billion yen, compared to a net cash inflow of 459.7 billion yen in the previous fiscal year. This change was mainly due to a smaller year-on-year increase in borrowings in the life insurance business and the banking business.
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 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.
For SME and SMP in the Music segment, and in the Pictures segment, the constant currency amounts are calculated by applying the monthly average U.S. dollar / yen exchange rates after aggregation on a U.S. dollar basis. This information is not a substitute for Sony’s consolidated financial statements measured in accordance with IFRS.
For SME and SMP in the Music segment, and in the Pictures segment, the constant currency amounts are calculated by applying the monthly average U.S. dollar / yen exchange rates after aggregation on a U.S. dollar basis.
Pictures Key Financial Figures Fiscal year ended March 31 2021 2022 (Yen in millions) Sales to external customers by product category Motion Pictures 265,301 518,840 Television Productions 267,123 419,494 Media Networks 219,376 298,065 Sales to external customers 751,800 1,236,399 Intersegment sales 1,187 2,512 Pictures segment total sales 752,987 1,238,911 Pictures segment operating income 79,851 217,393 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.
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.
Cash and cash equivalents of all segments excluding the Financial Services segment was 1 trillion 160.5 billion yen at March 31, 2022, a decrease of 129.3 billion yen compared with the balance as of March 31, 2021.
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.
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.
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.
Business Environment and Strategy As digital streaming continued to expand globally, including due to the recovery from the impact of COVID-19, the operating performance of the Music segment for the fiscal year ended March 31, 2022 reflected an increase in revenues from streaming services resulting from the enhanced discovery and development of artists, strengthening of Sony’s hip-hop and rap repertoire, and proactive acquisitions including the acquisition of the Alamo Records label.
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.
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.
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.
Music Key Financial Figures Fiscal year ended March 31 2021 2022 (Yen in millions) Sales to external customers by product category Recorded Music — Streaming 337,100 462,368 Recorded Music — Others 179,167 206,412 Music Publishing 156,862 200,334 Visual Media & Platform 254,121 231,418 Sales to external customers 927,250 1,100,532 Intersegment sales 12,617 16,417 Music segment total sales 939,867 1,116,949 Music segment operating income 184,786 210,933 The Music segment results include the yen-based results of SMEJ and the yen-translated results of SME and SMP, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.
Music Key Financial Figures Fiscal year ended March 31 2022 2023 (Yen in millions) Sales to external customers by product category Recorded Music — Streaming 462,368 598,868 Recorded Music — Others 206,412 286,270 Music Publishing 200,334 276,665 Visual Media & Platform 231,418 203,012 Sales to external customers 1,100,532 1,364,815 Intersegment sales 16,417 15,817 Music segment total sales 1,116,949 1,380,632 Music segment operating income 210,933 263,107 The Music segment results include the yen-based results of SMEJ and the yen-translated results of SME and SMP, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.
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 operating income (loss) for that segment.
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.
For all segments excluding the Financial Services segment, there was a 325.8 billion yen net cash outflow, an increase of 8.3 billion yen year-on-year.
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.
In these new business areas, by collaborating with various service partners, Sony plans to continue to work to expand its earnings base by creating new opportunities for the use of music content, and strengthen its relationships with artists by creating opportunities for artists to increase their own earnings.
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.
The net fair value of all the foreign exchange derivative contracts as of March 31, 2021 and 2022 was a liability of 4.5 billion yen and 6.4 billion yen, respectively.
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.
Liabilities for future policy benefits include the liabilities for the minimum guarantee benefits of variable annuities and variable life insurance contracts. - 56 - Table of Contents Policyholders’ account in the life insurance business Liabilities for policyholders’ account in the life insurance business represent the contract value that has accrued to the benefit of the policyholders as of the end of the reporting period.
Policyholders’ account in the life insurance business Liabilities for policyholders’ account in the life insurance business represent the contract value that has accrued to the benefit of the policyholders as of the end of the reporting period.
Fiscal year ended March 31 Impact of changes in foreign exchange rates 2021 2022 2021 to 2022 (Yen in billions) G&NS Sales 2,656.3 2,739.8 +124.5 Operating income 341.7 346.1 +15.7 EP&S Sales 2,068.1 2,339.2 +103.8 Operating income 127.9 212.9 +27.2 I&SS Sales 1,012.5 1,076.4 +55.5 Operating income 145.9 155.6 +18.5 During the fiscal year ended March 31, 2022, sales for the Music segment increased 19% year-on-year to 1 trillion 116.9 billion yen, while sales increased approximately 14% year-on-year on a constant currency basis.
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.
Imaging & Sensing Solutions (I&SS) Key Financial Figures Fiscal year ended March 31 2021 2022 (Yen in millions) Sales to external customers 937,859 992,200 Intersegment sales 74,638 84,224 I&SS segment total sales 1,012,497 1,076,424 I&SS segment operating income 145,884 155,597 For the fiscal year ended March 31, 2022, sales increased 63.9 billion yen year-on-year to 1 trillion 76.4 billion yen.
Imaging & Sensing Solutions (I&SS) Key Financial Figures Fiscal year ended March 31 2022 2023 (Yen in millions) Sales to external customers 992,200 1,301,481 Intersegment sales 84,224 100,706 I&SS segment total sales 1,076,424 1,402,187 I&SS segment operating income 155,597 212,214 For the fiscal year ended March 31, 2023, sales increased 325.8 billion yen year-on-year to 1 trillion 402.2 billion yen.
The descriptions of sales on a constant currency basis reflect sales obtained by applying the yen’s monthly average exchange rates from the fiscal year ended March 31, 2021 to local currency-denominated monthly sales in the fiscal year ended March 31, 2022.
Note: Sales on a Constant Currency Basis and the Impact of Foreign Exchange Rate Fluctuations The descriptions of sales on a constant currency basis reflect sales calculated by applying the yen’s monthly average exchange rates from the previous fiscal year to local currency-denominated monthly sales in the current fiscal year.
Foreign Exchange Fluctuations and Risk Hedging During the fiscal year ended March 31, 2022, the average rates of the yen were 112.3 yen against the U.S. dollar and 130.5 yen against the euro, which were 6.3 yen and 6.8 yen lower, respectively, than the fiscal year ended March 31, 2021.
Foreign Exchange Fluctuations and Risk Hedging During the fiscal year ended March 31, 2023, the average rates of the yen were 135.4 yen against the U.S. dollar and 140.9 yen against the euro, which were 23.1 yen and 10.4 yen weaker, respectively, than the fiscal year ended March 31, 2022.
For the fiscal year ended March 31, 2022, sales increased 177.1 billion yen to 1 trillion 116.9 billion yen.
For the fiscal year ended March 31, 2023, sales increased 263.7 billion yen to 1 trillion 380.6 billion yen.
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.
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.
Additionally, the previous fiscal year included a payment for an investment in Bilibili. The Financial Services segment used 17.6 billion yen of net cash in investing activities, essentially flat year-on-year. Financing Activities: Net cash outflow from financing activities during the current fiscal year ended March 31, 2022, was 336.6 billion yen, a decrease of 2.0 billion yen year-on-year.
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.
Game & Network Services (G&NS) Key Financial Figures Fiscal year ended March 31 2021 2022 (Yen in millions) Sales to external customers by product category Digital Software and Add-on Content 1,454,654 1,424,459 Network Services 382,950 409,355 Hardware & Others 767,109 840,542 Sales to external customers 2,604,713 2,674,356 Intersegment sales 51,565 65,407 G&NS segment total sales 2,656,278 2,739,763 G&NS segment operating income 341,718 346,089 (Units in millions) Major product unit sales PS4 ™ hardware 5.7 1.0 PS5 ™ hardware 7.8 11.5 - 33 - Table of Contents For the fiscal year ended March 31, 2022, sales increased 83.5 billion yen year-on-year to 2 trillion 739.8 billion yen.
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.
Key Financial Figures Fiscal year ended March 31 2021 2022 (Yen in millions) Financial services revenue 1,674,002 1,533,829 Financial Services segment operating income 154,765 150,111 Financial services revenue decreased 140.2 billion yen year-on-year to 1 trillion 533.8 billion yen, mainly due to a decrease in revenue at Sony Life.
Key Financial Figures Fiscal year ended March 31 2022 2023 (Yen in millions) Financial services revenue 1,533,829 1,454,546 Financial Services segment operating income 150,111 223,935 - 43 - Table of Contents For the fiscal year ended March 31, 2023, financial services revenue decreased 79.3 billion yen year-on-year to 1 trillion 454.5 billion yen, mainly due to a decrease in revenue at Sony Life.
This deterioration was primarily due to the recording of unrealized losses mainly on Sony’s shares of Spotify Technology S.A. in the current fiscal year, compared to the recording of unrealized gains on such shares in the previous fiscal year. - 32 - Table of Contents Income before Income Taxes For the fiscal year ended March 31, 2022, income before income taxes increased 119.5 billion yen year-on-year to 1 trillion 117.5 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.
The following table shows a breakdown of R&D costs for each business segment and Corporate R&D in the fiscal years ended March 31, 2021 and 2022.
The ratio of R&D costs to total revenue excluding the Financial Services segment was 7.3%, compared to 7.4% in the previous fiscal year. The following table shows a breakdown of R&D costs for each business segment and Corporate R&D in the fiscal years ended March 31, 2022 and 2023.
Furthermore, Sony plans to continue actively promoting initiatives in new business areas such as automotive and industrial equipment in the sensing area, as well as the solutions business. The automotive area has been growing steadily, and Sony will continue to work to build relationships with OEMs and platformers with the aim of increasing revenue from automotive sensors.
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.
Fourth Mid-Range Plan — Financial Targets and their Progress On April 28, 2021, Sony announced the financial targets for a fourth mid-range plan (“fourth mid-range plan”) that charts the path forward for Sony over the next three fiscal years, started on April 1, 2021 and ending on March 31, 2024.
Progress on the fourth mid-range plan Three-year cumulative adjusted EBITDA, which is the KPI of the fourth mid-range plan (“fourth mid-range plan”) that charts the path forward for Sony over the three fiscal years started on April 1, 2021 and ending on March 31, 2024, has progressed significantly beyond the initial plan.
These repurchases continue to be part of Sony’s strategic investments and are expected to be implemented in a flexible manner. * 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 and broadcasting rights included in Content assets as well as deferred insurance acquisition costs — the profit and loss amount that Sony deems to be non-recurring*** .
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****.
In the I&SS segment, a significant proportion of sales contracts are denominated in U.S. dollars, but manufacturing operations are located in Japan, and, therefore, yen appreciation against the U.S. dollar has a significantly negative impact on operating income. - 41 - Table of Contents In order to reduce the risk caused by foreign exchange rate fluctuations, Sony employs derivatives, including foreign exchange forward contracts and foreign currency option contracts, in accordance with a consistent risk management strategy.
In the I&SS segment, a significant proportion of sales contracts are denominated in U.S. dollars, but manufacturing operations are located in Japan, and, therefore, yen appreciation against the U.S. dollar has a significantly negative impact on operating income.
In addition, by capitalizing on the Music segment’s position as a part of the diverse Sony Group, Sony aims to provide a wide variety of marketing opportunities to its artists going forward.
Additionally, by leveraging the diversity of the Sony Group, Sony aims to provide a wide variety of marketing opportunities to its artists going forward.

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

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Biggest change(1) Total amounts of remuneration for Directors and Corporate Executive Officers and the number thereof Fixed remuneration (*3) Remuneration linked to business results Stock acquisition rights (*6) Restricted stock (*3/*8) Phantom Restricted Stock Plan (*9) Number of persons Amount Number of persons Amount Number of persons Amount Number of persons Amount Number of persons Amount Million Yen Million Yen Million Yen Million Yen Million Yen Directors 10 170 — — — — 10 40 — — (*4) (*7) (Outside Directors) (*1, 2) (9) (149) (—) (—) (—) (—) (9) (36) (—) (—) Corporate Executive Officers 6 539 6 777 6 540 6 796 1 135 (*5) Total 16 708 6 777 6 540 16 835 1 135 *1 The number of persons does not include two Directors who concurrently serve as Corporate Executive Officers, because Sony Group Corporation does not pay any additional remuneration for services as a Director to Directors who concurrently serve as Corporate Executive Officers. *2 The number of persons includes one Director who resigned on the day of the Ordinary General Meeting of Shareholders held on June 22, 2021, and one director who retired during his term of office. *3 Due to rounding, individual sums may not total 100%. *4 Sony Group 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, 2022 that was paid in June 2022. - 62 - Table of Contents *6 This is the amount of expenses Sony Group Corporation recorded during the fiscal year ended March 31, 2022 applicable to the stock acquisition rights that were granted. *7 Sony Group Corporation does not grant stock acquisition rights to Directors who do not concurrently serve as Corporate Executive Officers. *8 This is the amount of expenses Sony Group Corporation recorded during the fiscal year ended March 31, 2022 applicable to restricted stock. *9 The phantom restricted stock plan referenced above includes the amount which is to be paid to one Corporate Executive Officer who resigned on June 28, 2022, the date of the Ordinary General Meeting of Shareholders.
Biggest change(1) Total amounts of remuneration for Directors and Corporate Executive Officers and the number thereof Fixed remuneration Remuneration linked to business results Stock acquisition rights (*6) Restricted stock (*8/*9) Phantom Restricted Stock Plan (*9/*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 8 186 — — — — 8 46 1 95 (*3) (*7) (*11) (Outside Directors) (*1) (7) (159) (—) (—) (—) (—) (7) (41) (—) (—) Corporate Executive Officers 8 574 7 751 6 681 6 1,131 1 221 (*2) (*4) (*5) (*12) Total 16 760 7 751 6 681 14 1,178 2 316 *1 The number of persons does not include two Directors who concurrently serve as Corporate Executive Officers, because Sony Group Corporation does not pay any additional remuneration for services as a Director to Directors who concurrently serve as Corporate Executive Officers. *2 The number of persons includes two Corporate Executive Officers who resigned on the day of the Ordinary General Meeting of Shareholders held on June 28, 2022. *3 Sony Group Corporation does not pay remuneration linked to business results to Directors who do not concurrently serve as Corporate Executive Officers. *4 The number of persons includes one Corporate Executive Officer who resigned on the day of the Ordinary General Meeting of Shareholders held on June 28, 2022. *5 This is the amount of remuneration linked to business results for the fiscal year ended March 31, 2023 that was paid in June 2023. *6 This is the amount of expenses Sony Group Corporation recorded during the fiscal year ended March 31, 2023 applicable to the stock acquisition rights that were granted. *7 Sony Group Corporation does not grant stock acquisition rights to Directors who do not concurrently serve as Corporate Executive Officers. *8 This is the amount of expenses Sony Group Corporation recorded during the fiscal year ended March 31, 2023 applicable to restricted stock. *9 Due to rounding, individual sums may not total 100%. *10 The phantom restricted stock plan referenced above includes the amount which is to be paid to one Director who resigned on the day of the Ordinary General Meeting of Shareholders held on June 20, 2023 and one former Corporate Executive Officer who resigned on March 31, 2023.
February 2017 Board member, Chair of Remuneration Committee, Great Portland Estates plc (present) 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. (present) June 2019 Director, the Corporation (present) September 2019 Chair of the Board, Chair of Nominating Committee, Logitech International S.A.
In addition, Senior Executives, including the Corporate Executive Officers, of Sony Group Corporation have established and currently maintain a system to identify and control risks that may cause losses to Sony regarding the areas of which they are responsible.
In addition, Senior Executives, including the Corporate Executive Officers, of Sony Group Corporation have established and currently maintain a system to identify and control risks that may cause losses to Sony regarding the areas for which they are responsible.
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.
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.
(5) Matters related to Outside Directors Sony Group Corporation expects that each outside Director play an important role in ensuring proper business decisions by Sony and effective input and oversight by the Board through actively exchanging opinions and having discussions about Sony’s business based on his or her various and broad experience, knowledge and expertise.
(5) Matters related to Outside Directors Sony Group Corporation expects that each outside Director plays an important role in ensuring proper business decisions by Sony and effective input and oversight by the Board through actively exchanging opinions and having discussions about Sony’s business based on his or her various and broad experience, knowledge and expertise.
Sony generally considers its labor relations to be good. In Japan, Sony Group Corporation and several subsidiaries have labor unions. In the G&NS, EP&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. 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.
Outline of the Terms of Directors and Officers Liability Insurance Policy Sony Group Corporation has, at its expense through insurance premiums, entered into a directors and officers liability insurance policy for all Directors, Corporate Executive Officers, corporate auditors, and persons in equivalent positions (the “Executives”) of itself and its subsidiaries over which Sony Group Corporation has a direct or indirect ownership more than 50%.
Outline of the Terms of Directors and Officers Liability Insurance Policy Sony Group Corporation has, at its expense in respect of insurance premiums, entered into a directors and officers liability insurance policy for all Directors, Corporate Executive Officers, corporate auditors, and persons in equivalent positions (the “Executives”) of itself and its subsidiaries over which Sony Group Corporation has a direct or indirect ownership more than 50%.
A summary of such liability limitation agreement is as follows: (i) In a case where a non-executive Director is liable to the company after the execution of the liability limitation agreement for damages pursuant to Article 423, Paragraph 1 of the Companies Act, such liabilities shall be limited to the greater of either 30 million yen or an amount equal to the aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the Companies Act, only where the non-executive Director acted in good faith without any gross negligence in performing his/her duties as a Director of the company.
A summary of such liability limitation agreement is as follows: (i) In a case where an outside Director is liable to the company after the execution of the liability limitation agreement for damages pursuant to Article 423, Paragraph 1 of the Companies Act, such liabilities shall be limited to the greater of either 30 million yen or an amount equal to the aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the Companies Act, only where the outside Director acted in good faith without any gross negligence in performing his/her duties as a Director of the company.
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: 2 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: 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.
The outline of the terms of such directors and officers liability insurance policy is as follows: (i) The insurance policy covers compensation for damages, litigation costs (including attorney’s fees) and other costs that may be incurred by the Executives as a result of assuming responsibility for the execution of their duties or receiving claims related to such responsibility.
The outline of the terms of such liability insurance policy is as follows: (i) The insurance policy covers compensation for damages, litigation costs (including attorney’s fees) and other costs that may be incurred by the Executives as a result of assuming responsibility for the execution of their duties or receiving claims related to such responsibility.
During the fiscal year ended March 31, 2021, although there was an increase of employees in the I&SS and Financial Services segments, there was a decrease of employees in the EP&S and Pictures segments, as well as in All Other. In the EP&S segment, this was mainly due to closure of manufacturing sites in Malaysia and Brazil.
During the fiscal year ended March 31, 2021, although there was an increase of employees in the I&SS and Financial Services segments, there was a decrease of employees in the ET&S and Pictures segments, as well as in All Other. In the ET&S segment, this was mainly due to closure of manufacturing sites in Malaysia and Brazil.
In the EP&S segment, this was mainly due to closure of manufacturing sites in Malaysia. Approximately 9% of the total number of employees were members of labor unions. As of March 31, 2021, Sony had approximately 109,700 employees, a decrease of approximately 2,000 employees from March 31, 2020.
In the ET&S segment, this was mainly due to closure of manufacturing sites in Malaysia. Approximately 9% of the total number of employees were members of labor unions. As of March 31, 2021, Sony had approximately 109,700 employees, a decrease of approximately 2,000 employees from March 31, 2020.
In addition, the above weighted-average fair value per share was calculated to recognize compensation expense for the fiscal year ended March 31, 2022 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, 2022 for 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, 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.
(present) Sakie Akiyama Responsibility as a Director: Member of the Compensation Committee Date of Birth: December 1, 1962 Number of Years Served as a Director: 3 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1987 Joined Arthur Andersen & Co.
(present) Sakie Akiyama Responsibility as a Director: Member of the Compensation Committee Date of Birth: December 1, 1962 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1987 Joined Arthur Andersen & Co.
During the fiscal year ended March 31, 2022, 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, 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.
(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 - 71 - Table of Contents necessary.
(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.
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, 2022.
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.
(3) Procedure of the Recent Evaluation First, the Board discussed and 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, 2022.
(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.
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 - 63 - Table of Contents 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 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.
“Adjusted EPS” is calculated by using the value excluding the profit and loss amount that Sony deems to be 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, 2022 is calculated by dividing adjusted net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2022 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. *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.
Kraft Jr. 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.
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.
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, 2022 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 2, 2023 and which were outstanding as of the same date.
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.
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.
As a result, Sony is obligated to make various disclosures to the public in accordance with applicable securities laws, - 77 - Table of Contents regulations and rules in those countries and listing standards of the stock exchanges on which Sony Group Corporation’s shares are listed. Sony is committed to full compliance with all requirements applicable to its public disclosures.
As a result, Sony is obligated to make various disclosures to the public in accordance with applicable securities laws, regulations and rules in those countries and listing standards of the stock exchanges on which Sony Group Corporation’s shares are listed. Sony is committed to full compliance with all requirements applicable to its public disclosures.
Board of Directors Kenichiro Yoshida Responsibility as a Director: — Date of Birth: October 20, 1959 Number of Years Served as a Director: 8 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: 9 years Principal Business Activities Outside the Corporation: Outside Director, M3, Inc.
(5) Corporate Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2022 The Business Results Linked Standard Payment Amount for each Corporate Executive Officer for the fiscal year ended March 31, 2022 was determined to be in the range between 60% and 100% of the amount of their fixed remuneration of such Corporate Executive Officer according to his/her responsibility.
(5) Corporate Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2023 The Business Results Linked Standard Payment Amount for each Corporate Executive Officer for the fiscal year ended March 31, 2023 was determined to be in the range between 60% and 100% of the amount of the fixed remuneration of such Corporate Executive Officer according to his/her responsibility.
(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 (present) - 57 - Table of Contents Hiroki Totoki Responsibility as a Director: — Date of Birth: July 17, 1964 Number of Years Served as a Director: 3 years Principal Business Activities Outside the Corporation: Outside Director, Recruit Co., Ltd.
(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.
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 28, 2022.
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.
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, 2022 filed on June 28, 2022 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 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.
(present) April 2021 Professor, Graduate School of Global Business, Meiji University (present) June 2021 Outside Director, Hitachi Construction Machinery Co., Ltd.
(present) April 2021 Professor, Professional Graduate School, Graduate School of Global Business, Meiji University (present) June 2021 Outside Director, Hitachi Construction Machinery Japan Co., Ltd.
(ii) In a case where a non-executive Director is reelected as a non-executive Director of the company and reassumes his/her office as such on the expiration of the term of his/her office as a non-executive Director of the company, the liability limitation agreement shall continue to be effective after the reelection and re-assumption without any action or formality.
(ii) In a case where an outside Director is reelected as an outside Director of the company and reassumes his/her office as such on the expiration of the term of his/her office as an outside Director of the company, the liability limitation agreement shall continue to be effective after the reelection and re-assumption without any action or formality.
(present) Outside Director, Orix Corporation (present) June 2020 Outside Director, Mitsubishi Corporation (present) - 59 - Table of Contents 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: 3 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) 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.
The recent Evaluation was conducted, as the company did with the previous Evaluation, with the support of a third-party outside counsel with expertise in Japanese and global corporate governance practices (the “Outside Counsel”) in order to ensure transparency and objectivity and to obtain professional advice.
The recent Evaluation was conducted, with the support of a third-party outside counsel with expertise in Japanese and global corporate governance practices (the “Outside Counsel”) in order to ensure transparency and objectivity and to obtain professional advice.
As a result, the ratio of remuneration linked to business results of Corporate Executive Officers for the fiscal year ended March 31, 2022 varied from 167.8% 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 and broadcasting rights included in Content assets as well as deferred insurance acquisition costs — the profit and loss amount that Sony deems to be 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, 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.
(2) Recent Evaluation From February through May 2022, under the leadership of the Chairman of the Board, the Board conducted the Evaluation mainly in respect of Board and Committee activities in the fiscal year ended March 31, 2022 after confirming that actions proposed in response to the results of the previous Evaluation were appropriately taken.
(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.
In the Pictures segment, Sony also generally considers its labor relations to be good. A number of Pictures’ subsidiaries are signatories to union contracts. During the fiscal year ended March 31, 2022, negotiations have been conducted and agreements reached with a number of unions.
In the Pictures segment, Sony also generally considers its labor relations to be good. A number of Pictures’ subsidiaries are signatories to union contracts. During the fiscal year ended March 31, 2023, negotiations were conducted and agreements reached with a number of unions.
Even with the consent of all of the Directors, in no event may any outside Director be re-elected more than eight times.
Even with the consent of all of the Directors, in no event may any outside Director be re-elected more than eight times (nine years, in total).
The financial performance KPIs and the weighting of such financial performance KPIs primarily used for Corporate Executive Officers in the fiscal year ended March 31, 2022 were as follows: KPI Weight Target to be achieved for the fiscal year ended March 31, 2022 (Consolidated) Result for the fiscal year ended March 31, 2022 (Consolidated) Adjusted EBITDA (*1) 50% Amount determined in order to achieve the Adjusted EBITDA (defined below) target of 4.3 trillion yen for the three-year period from the fiscal year ended March 31, 2022 1,597.9 billion yen Adjusted EPS (*2) 50% 523.2 yen 640.2 yen (*3) Adjusted EBITDA, which is the most important financial performance KPI under the fourth mid-range plan, was selected as a Financial Performance KPI to enhance the growth potential of the entire Sony Group under the fourth mid-range plan.
The financial performance KPIs and the weighting of such financial performance KPIs used for Corporate Executive Officers in the fiscal year ended March 31, 2023 were as follows: KPI Weight Target to be achieved for the fiscal year ended March 31, 2023 (Consolidated) Result for the fiscal year ended March 31, 2023 (Consolidated) Adjusted EBITDA (*1) 50% Amount determined in order to achieve the Adjusted EBITDA (defined below) target of 4.3 trillion yen for the three-year period from the fiscal year ended March 31, 2022 1,703.4 billion yen Adjusted EPS (*2) 50% 659.3 yen 737.06 yen (*3) Adjusted EBITDA, which is determined as the most important performance KPI under the fourth mid-range plan, was selected as a Financial Performance KPI to enhance the growth potential of the entire Sony Group under the fourth mid-range plan.
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, please refer to “Corporate Executive Officer remuneration linked to business results for the fiscal year ended March 31, 2022” 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, 2022 was 2,994 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 “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.
For additional requirements for outside Directors under the Companies Act, refer to “Item 16G. Disclosure About Differences in Corporate Governance ”. Also, each outside Director may, by resolution of the Nominating Committee, be nominated as a Director candidate for re-election up to five times, and thereafter by resolution of the Nominating Committee and by consent of all of the Directors.
For additional requirements for outside Directors under the Companies Act, refer to “Item 16G. Corporate Governance ”. Also, each outside Director may be nominated as a Director candidate for re-election up to five times (six years, in total), and thereafter by resolution of the Nominating Committee and by consent of all of the Directors.
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 EP&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 - 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).
As to the remuneration linked to stock price, 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, 2022 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, 2023 and the issue price of the restricted stock when granted.
Senior Executives (Corporate Executive Officer, Senior Executive Vice President and Executive Vice President) (1) Total number of Senior Executives: 18 (including 6 Corporate Executive Officers) (as of June 28, 2022) (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: 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.
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 10 people own shares) was approximately 0.031% of the total shares outstanding as of June 2, 2022.
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.
For further information about the profit and loss amount that Sony deems to be non-recurring, refer to “Issues Facing Sony and Management’s Response to those Issues: Fourth Mid-Range Plan — Financial Targets and their Progress” in “Item 5.
For further information about the profit and loss amount that Sony deems non-recurring, refer to “Issues Facing Sony and Management’s Response to those Issues: Fourth Mid-Range Plan — Financial Targets and their Progress” in “Item 5. Operating and Financial Review and Prospects .” C.
Number of Employees by Segment and Region March 31 2020 2021 2022 By segment: G&NS 9,500 9,600 10,200 Music 9,900 9,900 10,800 Pictures 8,400 8,000 8,100 EP&S 46,800 43,700 40,200 I&SS 15,800 16,800 18,100 Financial Services 12,300 12,900 13,200 All Other 3,200 2,800 2,300 Unallocated — Corporate employees 5,800 6,000 6,000 By region: Japan 53,700 54,500 55,100 Outside of Japan 58,000 55,200 53,800 Total 111,700 109,700 108,900 In addition, the average number of employees for the fiscal years ended March 31, 2020, 2021 and 2022 calculated by averaging the total number of employees at the end of each quarter, was approximately 113,000, 110,700 and 109,600 respectively.
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.
Shiro Kambe Responsibility as an Officer: Senior EVP, Officer in charge of Legal, Compliance, Privacy, Corporate Communications, Brand Strategy, Sustainability and External Relations Date of Birth: December 18, 1961 Number of Years Served as a Corporate Executive Officer: 8 years Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined the Corporation June 2010 SVP, Corporate Executive, the Corporation June 2014 EVP, Corporate Executive Officer, the Corporation June 2020 Senior EVP, Corporate Executive Officer, the Corporation (present) Kazushi Ambe Responsibility as an Officer: Senior EVP, Officer in charge of Human Resources and General Affairs Date of Birth: April 23, 1961 Number of Years Served as a Corporate Executive Officer: 6 years Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined the Corporation October 2001 Vice President, Sony Ericsson Mobile Communications April 2006 Senior Vice President, Sony Corporation of America November 2014 SVP, Corporate Executive, the Corporation June 2016 EVP, Corporate Executive Officer, the Corporation June 2020 Senior EVP, Corporate Executive Officer, the Corporation (present) Toshimoto Mitomo Responsibility as an Officer: Senior EVP, Officer in charge of Intellectual Property and Business Incubation Platform, Sony Group China Representative Date of Birth: January 6, 1963 Number of Years Served as a Corporate Executive Officer: — Principal Business Activities Outside Sony: None Brief Personal History: April 1985 Joined the Corporation June 2013 SVP, Corporate Executive, the Corporation June 2019 EVP, the Corporation April 2022 Senior EVP, Corporate Executive Officer, the Corporation (present) - 61 - Table of Contents Hiroaki Kitano Responsibility as an Officer: Senior EVP and CTO, Officer in charge of R&D and AI Collaboration Date of Birth: March 16, 1961 Number of Years Served as a Corporate Executive Officer: — Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined NEC Corporation August 1993 Joined Sony Computer Science Laboratories, Inc.
Toshimoto Mitomo Responsibility as an Officer: Executive Deputy President and CSO, Officer in charge of Intellectual Property, Business Strategy, Business Development and Business Incubation Platform Date of Birth: January 6, 1963 Number of Years Served as a Corporate Executive Officer: 1 year Principal Business Activities Outside Sony: None Brief Personal History: April 1985 Joined the Corporation June 2013 SVP, Corporate Executive, the Corporation June 2019 EVP, the Corporation April 2022 Senior EVP, Corporate Executive Officer, the Corporation April 2023 Executive Deputy President and CSO, Corporate Executive Officer, the Corporation (present) Shiro Kambe Responsibility as an Officer: Senior EVP, Officer in charge of Legal, Compliance, Privacy, Corporate Communications, Brand, Sustainability, External Relations, Quality Management, and the Board Secretariat Date of Birth: December 18, 1961 Number of Years Served as a Corporate Executive Officer: 9 years Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined the Corporation June 2010 SVP, Corporate Executive, the Corporation June 2014 EVP, Corporate Executive Officer, the Corporation June 2020 Senior EVP, Corporate Executive Officer, the Corporation (present) Kazushi Ambe Responsibility as an Officer: Senior EVP, Officer in charge of Human Resources, General Affairs, Lead of Group Diversity, Equity & Incubation and the Corporate Executive Office and Sony Group China Representative Date of Birth: April 23, 1961 Number of Years Served as a Corporate Executive Officer: 7 years Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined the Corporation October 2001 Vice President, Sony Ericsson Mobile Communications April 2006 Senior Vice President, Sony Corporation of America November 2014 SVP, Corporate Executive, the Corporation June 2016 EVP, Corporate Executive Officer, the Corporation June 2020 Senior EVP, Corporate Executive Officer, the Corporation (present) Hiroaki Kitano Responsibility as an Officer: Senior EVP and CTO, Officer in charge of R&D and AI Collaboration Date of Birth: March 16, 1961 Number of Years Served as a Corporate Executive Officer: 1 year Principal Business Activities Outside Sony: None Brief Personal History: April 1984 Joined NEC Corporation August 1993 Joined Sony Computer Science Laboratories, Inc.
Kraft Jr. 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 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.
At a Board meeting held on May 13, 2009 and April 30, 2015, the Board amended and updated the internal control and governance framework at a Board meeting held on May 10, 2022, the Board reaffirmed such framework 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 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.
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 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.
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.
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.
An agreement was reached with the American Federation of Musicians to extend the Theatrical and Television Agreements through November 14, 2022.
An agreement was reached with the American Federation of Musicians to extend the Theatrical and Television Agreements through November 13, 2023.
Specifically, in principle, each year at the meeting of the Compensation Committee held after the Ordinary General Meeting of the Shareholders, the amount of basic remuneration and the content of each Director’s and Corporate Executive Officer’s compensation for the corresponding fiscal year are determined.
Specifically, in principle, as for Directors, each year at the meeting of the Compensation Committee held after the Ordinary General Meeting of the Shareholders, the amount of basic remuneration and the content of compensation for the corresponding fiscal year are determined.
In determining whether to appoint or remove a member of the Nominating Committee, continuity of the Nominating Committee shall be duly taken into account. As of June 28, 2022, the Nominating Committee is comprised of three outside Directors.
In determining whether to appoint or remove a member of the Nominating Committee, continuity of the Nominating Committee shall be duly taken into account. As of the date of this report, the Nominating Committee is comprised of three outside Directors.
In determining whether to appoint or remove a member of the Compensation Committee, continuity of the Compensation Committee shall be duly taken into account. As of June 28, 2022, the Compensation Committee is comprised of three outside Directors.
In determining whether to appoint or remove a member of the Compensation Committee, continuity of the Compensation Committee shall be duly taken into account. As of the date of this report, the Compensation Committee is comprised of three outside Directors.
June 2019 Director, the 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: 2 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 (position currently defined as “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) - 60 - Table of Contents Joseph A.
(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.
As of June 28, 2022, 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 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.
The amount of each component and its percentage of total remuneration shall be set at an appropriate level determined in accordance with the basic policy above and 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. - 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.
Approximately 11% of the total number of employees were members of labor unions. - 78 - Table of Contents The following table shows the number of employees of Sony by segment and region as of March 31, 2020, 2021 and 2022.
Approximately 10% of the total number of employees were members of labor unions. The following table shows the number of employees of Sony by segment and region as of March 31, 2021, 2022 and 2023.
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; - 76 - Table of Contents • Interviewed the Chairman of the Board and the Chair of each Committee, Directors who are concurrently in the positions of Corporate Executive Officers, and certain additional Corporate Executive Officers about the Board and Committee status and practices; 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; - 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.
Furthermore, the purpose of the plan for the Non-Executive 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 the Non-Executive Directors.
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 target for Adjusted EPS for the fiscal year ended March 31, 2022 was 523.2 yen, which was obtained by dividing the forecast of net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2022, which was disclosed in April, 2021 (660 billion yen) by the number of diluted shares outstanding at the beginning of such fiscal year.
The target for Adjusted EPS for the fiscal year ended March 31, 2023 was 659.3 yen, which was obtained by dividing the forecast of net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2023, which was disclosed in May, 2022 (830 billion yen) by the number of diluted shares outstanding at the beginning of such fiscal year.
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. • Securing a talent pool possessing requisite abilities from a global perspective; and • Providing effective incentives to improve business results on a short-, mid- and long-term basis.
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 the Americas, some manufacturing sites have 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 several labor unions and generally considers its labor relations to be good.
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.
(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 restricted stock was granted. • In principle, remuneration for a Senior Executive who has greater management responsibility and influence over Sony as a whole has a higher proportion of their remuneration 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. • 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.
Year granted (Fiscal year ended March 31) Total number of shares subject to stock acquisition rights Exercise price per share (in thousands) 2022 290 14,350 yen 2021 260 9,237 yen 2020 253 6,705 yen 2019 237 6,440 yen 2018 97 5,231 yen 2017 190 3,364 yen 2016 45 3,404 yen 2015 97 2,410.5 yen 2014 7 2,007 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) 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.
Considering these expectations, the policy and procedures on the election of Director candidates, including independent outside Director candidates, are set forth as described above. As of June 28, 2022, the Board has 10 Directors, seven of whom are outside Directors.
Considering these expectations, the policy and procedures on the election of Director candidates, including independent outside Director candidates, are set forth as described above. As of the date of this report, the Board has 10 Directors, eight of whom are outside Directors.
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 is elected from among those Directors that are not also the Representative Corporate Executive Officer, and the Chairman 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 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.
No Director remuneration is paid to those Directors who concurrently serve as Corporate Executive Officers. • Securing a talent pool of Directors possessing requisite abilities from a global perspective; and • Ensuring the effectiveness of the supervisory function of Directors. Based on the above, Director remuneration shall consist of the following components.
No Director remuneration is paid to those Directors who concurrently serve as Corporate Executive Officers. • Attracting and retaining an adequate talent pool of Directors possessing the requisite abilities to excel in the global marketplace; and • Ensuring the effectiveness of the supervisory function of Directors. Based on the above, Director remuneration shall consist of the following components.
Other Officers (Senior Vice President) (1) Total number of other officers: 8 (as of June 21, 2022) - 74 - Table of Contents (2) Purpose/Authority The primary roles of other officers are to carry out their assignments within designated areas, such as headquarters functions and/or research and development, in accordance with the fundamental policies determined by the Board and Senior Executives.
Other Officers (Senior Vice President) (1) Total number of other officers: 10 (as of June 20, 2023) (2) Purpose/Authority The primary roles of other officers are to carry out their assignments within designated areas, such as headquarters functions and/or R&D, in accordance with the fundamental policies determined by the Board and Senior Executives.
The Chairman of the Board and the Vice Chairman of the Board are outside Directors; all members of the Nominating Committee, the Compensation Committee and the Audit Committee are outside Directors. Pursuant to the Articles of Incorporation, Sony Group Corporation has entered into a liability limitation agreement with all non-executive Directors including outside Directors.
The Chairman of the Board is an outside Director; all members of the Nominating Committee, the Compensation Committee and the Audit Committee are outside Directors. - 75 - Table of Contents Pursuant to the Articles of Incorporation, Sony Group Corporation has entered into a liability limitation agreement with all outside Directors.
For reconciliation of Adjusted EBITDA to net income attributable to Sony Group Corporation’s stockholders, refer to “Issues Facing Sony and Management’s Response to those Issues: Fourth Mid-Range Plan — Financial Targets and their Progress” in “Item 5.D Trend Information. ” As outlined above under “(3) Basic policy regarding Director and Senior Executive remuneration” remuneration linked to business results for Senior Executives for the fiscal year ended March 31, 2022 was determined based on the level of achievement of the financial performance KPIs and the individual performance for which those Senior Executives were responsible.
For reconciliation of Adjusted EBITDA to net income attributable to Sony Group Corporation’s stockholders, refer to “Issues Facing Sony and Management’s Response to those Issues: Fourth Mid-Range Plan — Financial Targets and their Progress” in “Item 5.D Trend Information. ” As outlined above under “(3) Basic policy regarding Director and Senior Executive remuneration” remuneration linked to business results for Senior Executives for the fiscal year ended March 31, 2023 was determined based on the level of achievement of the indicators which were selected based on the areas of responsibility of the relevant Senior Executive and the individual performance of such areas of responsibility. - 72 - Table of Contents The amounts to be paid to the Senior Executives were, in principle, determined within the range from 0% to 200% of the Business Results Linked Standard Payment Amount.
Moreover, at least one Audit Committee Member shall meet the audit committee financial expert requirements or such other equivalent requirements of the U.S. securities laws and regulations as may from time to time be applicable to Sony Group Corporation. The Board makes a determination on whether or not such Audit Committee Members meet these requirements.
Moreover, at least one Audit Committee Member shall meet the audit committee financial expert requirements or such other equivalent requirements of the U.S. securities laws and regulations as may from time - 77 - Table of Contents to time be applicable to Sony Group Corporation.
The results for the Financial Performance KPIs for the fiscal year ended March 31, 2022 were as follows: Adjusted EBITDA: 1,597.9 billion yen (while net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2022 was 882.2 billion), and Adjusted EPS: 640.2 yen (*3), each exceeding the targeted amount.
The results for the Financial Performance KPIs for the fiscal year ended March 31, 2023 were as follows: Adjusted EBITDA: 1,703.4 billion yen (while net income attributable to Sony Group Corporation’s stockholders for the fiscal year ended March 31, 2023 was 937.1 billion), and Adjusted EPS: 737.06 yen, each exceeding the targeted amount.
Also, each secretariat office verifies appropriately whether requested information is provided smoothly. In the event that the members consult with external specialists, participate in various seminars and so on to perform their duties, the costs and expenses in connection with such activities are borne by the company in accordance with applicable internal rules.
In the event that the members consult with external specialists, participate in various seminars and so on to perform their duties, the costs and expenses in connection with such activities are borne by the company in accordance with applicable internal rules.
All Directors must meet the qualifications below: (a) He/she shall not be a director, a statutory auditor, a corporate executive officer, a general manager or other employee of any company in competition with Sony in any of Sony’s principal businesses (a “Competing Company”) or own 3% or more of the shares of any Competing Company. - 70 - Table of Contents (b) He/she shall not be or have been a representative partner or partner of Sony’s independent auditor the past three years before being nominated as a Director.
All Directors must meet the qualifications below: (a) He/she shall not be a director, a statutory auditor, a corporate executive officer, a general manager or other employee of any company in competition with Sony in any of Sony’s principal businesses (a “Competing Company”) or own 3% or more of the shares of any Competing Company.
December 2009 Director, President, Sony Network Entertainment International LLC June 2013 Director, the Corporation (present) Toshiko Oka Responsibility as a Director: Chair of the Audit Committee Date of Birth: March 7, 1964 Number of Years Served as a Director: 4 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1986 Joined Tohmatsu Touche Ross Consulting Limited July 2000 Joined Asahi Arthur Anderson Limited September 2002 Principal, Deloitte Tohmatsu Consulting Co., Ltd.
June 2019 Director, the Corporation (present) March 2023 Outside Director, Shiseido Company, Limited (present) - 62 - Table of Contents Toshiko Oka Responsibility as a Director: Chair of the Audit Committee Member of the Nominating Committee Date of Birth: March 7, 1964 Number of Years Served as a Director: 5 years Brief Personal History and Principal Business Activities Outside the Corporation: April 1986 Joined Tohmatsu Touche Ross Consulting Limited July 2000 Joined Asahi Arthur Anderson Limited September 2002 Principal, Deloitte Tohmatsu Consulting Co., Ltd.
Nominating Committee (1) Members: 3 outside Directors (as of June 28, 2022) Name Position Shuzo Sumi Chair of the Nominating Committee (Outside Director) Yoshihiko Hatanaka Nominating Committee Member (Outside Director) Wendy Becker Nominating Committee Member (Outside Director) (2) Purpose/Authority The primary roles of the Nominating Committee are to: (a) determine the content of proposals regarding the appointment/dismissal of Directors to be submitted for approval at a General Meeting of Shareholders and (b) evaluate management succession plans, which the CEO develops, for the CEO and other executives designated by the Nominating Committee.
Nominating Committee (1) Members: 3 outside Directors (as of June 20, 2023) Name Position Yoshihiko Hatanaka Chair of the Nominating Committee (Outside Director) Toshiko Oka Nominating Committee Member (Outside Director) Wendy Becker Nominating Committee Member (Outside Director) (2) Purpose/Authority The primary roles of the Nominating Committee are to: (a) determine the content of proposals regarding the appointment/dismissal of Directors to be submitted for approval at a General Meeting of Shareholders and (b) evaluate management succession plans, which the CEO develops, for the CEO and other executives designated by the Nominating Committee. - 76 - Table of Contents The Nominating Committee determines the content of proposals regarding the appointment and dismissal of Directors, considering the policy on composition of the Board, the qualifications for Directors and the limitation of re-election of Directors described above.
The purpose of the plan for the Corporate Executive Officers and other executives of Sony Group Corporation 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 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.
(present) June 2020 EVP, the Corporation April 2022 Senior EVP and CTO, Corporate Executive Officer, the Corporation (present) Kenichiro Yoshida, Hiroki Totoki, Shiro Kambe, Kazushi Ambe, Toshimoto Mitomo and Hiroaki Kitano are engaged on a full-time basis by Sony Group Corporation. There is no family relationship between any of the persons named above.
(currently Sony Research Inc.) (present) June 2020 EVP, the Corporation April 2022 Senior EVP and CTO, Corporate Executive Officer, the Corporation (present) - 65 - Table of Contents Kenichiro Yoshida, Hiroki Totoki, Toshimoto Mitomo, Shiro Kambe, Kazushi Ambe and Hiroaki Kitano are engaged on a full-time basis by Sony Group Corporation.

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Item 7. Management's Discussion & Analysis

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

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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** March 22, 2017 BlackRock Japan Co., Ltd. and 8 Joint Holders 79,184,569 6.27 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 * 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. - 80 - Table of Contents To the knowledge of Sony Group Corporation, it is not directly or indirectly owned or controlled by any other corporation, by any foreign government or by any other natural or legal person either severally or jointly.
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.
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.
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.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders As of March 31, 2022, there were 1,261,081,781 shares of Common Stock outstanding, including 24,078,136 shares of treasury stock.
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.
As of March 31, 2022, the number of registered ADR holders was 4,810 and the number of registered holders of Common Stock in the U.S. was 397.
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.
Out of the total outstanding shares, 119,812,598 shares were in the form of American Depositary Receipts (“ADRs”) and 225,103,726 shares were held of record in the form of Common Stock by residents in the U.S.
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.
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To the knowledge of Sony Group Corporation, it is not directly or indirectly owned or controlled by any other corporation, by any foreign government or by any other natural or legal person either severally or jointly.

Other SONY 10-K year-over-year comparisons