SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of AUGUST 2021

Commission File Number: 001-06439

SONY GROUP CORPORATION

(Translation of registrant's name into English)

1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN

(Address of principal executive offices)

The registrant files annual reports under cover of Form 20-F.

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F,

Form 20-F  X Form 40-F __

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SONY GROUP CORPORATION

(Registrant)

By:  /s/  Hiroki Totoki

                (Signature)

Hiroki Totoki

Executive Deputy President and

Chief Financial Officer

Date: August 4, 2021

List of materials

Documents attached hereto:

i) Press release:  Quarterly Financial Statements for the First Quarter Ended June 30, 2021 And Outlook for the Fiscal Year Ending March 31, 2022.

Quarterly Financial Statements

for the First Quarter Ended June 30, 2021

And

Outlook for the Fiscal Year Ending March 31, 2022

August 4, 2021

Sony Group Corporation

Quarterly Financial Statements (Unaudited)	F-1
Condensed Consolidated Statements of Financial Position	F-1
Condensed Consolidated Statements of Income (Three months ended June 30)	F-3
Condensed Consolidated Statements of Comprehensive Income (Three months ended June 30)	F-4
Condensed Consolidated Statements of Changes in Stockholders’ Equity	F-5
Condensed Consolidated Statements of Cash Flows (Three months ended June 30)	F-6
Notes to Condensed Consolidated Financial Statements	F-8
-      Business Segment Information	F-8
-      Going Concern Assumption	F-14
-      Accounting Policy and Other Information	F-14
-      First-time Adoption	F-15
Outlook for the Fiscal Year Ending March 31, 2022	1
Supplemental Information	4
Cautionary Statement	5

All financial information is presented on the basis of International Financial Reporting Standards (“IFRS”).

Sony Group Corporation and its consolidated subsidiaries are together referred to as “Sony” or “Sony Group”. 

(Unaudited)

Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Financial Position

	Yen in millions
	April 1, 2020		March 31, 2021		June 30, 2021		Change from March 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		1,512,523		1,786,982		1,725,218		(61,764	)
Investments and advances in the Financial Services segment		327,092		411,982		390,918		(21,064	)
Trade and other receivables, and contract assets		1,194,334		1,365,493		1,441,588		76,095
Inventories		559,779		636,668		758,041		121,373
Other financial assets		135,482		117,682		98,906		(18,776	)
Other current assets		441,974		396,210		437,308		41,098
Total current assets		4,171,184		4,715,017		4,851,979		136,962
Non-current assets:
Investments accounted for using the equity method		204,291		225,086		227,001		1,915
Investments and advances in the Financial Services segment		16,352,285		17,296,546		17,680,447		383,901
Property, plant and equipment		917,198		990,541		1,052,944		62,403
Right-of-use assets		373,282		358,034		370,399		12,365
Goodwill		690,929		726,109		789,918		63,809
Content assets		992,644		1,062,547		1,098,676		36,129
Other intangible assets		377,500		391,055		392,368		1,313
Deferred insurance acquisition costs		187,904		623,986		636,679		12,693
Deferred tax assets		210,333		215,669		193,736		(21,933	)
Other financial assets		321,721		695,764		753,449		57,685
Other non-current assets		167,795		207,489		222,093		14,604
Total non-current assets		20,795,882		22,792,826		23,417,710		624,884
Total assets		24,967,066		27,507,843		28,269,689		761,846

(Continued on the following page.)

F-1

Condensed Consolidated Statements of Financial Position (Continued)

	Yen in millions
	April 1, 2020			March 31, 2021			June 30, 2021			Change from March 31, 2021
LIABILITIES
Current liabilities:
Short-term borrowings		824,045			1,201,747			1,459,658			257,911
Current portion of long-term debt		98,923			205,406			207,180			1,774
Trade and other payables		1,310,536			1,596,563			1,682,260			85,697
Deposits from customers in the banking business		2,347,387			2,682,156			2,717,538			35,382
Income taxes payables		85,346			84,431			77,839			(6,592	)
Participation and residual liabilities in the Pictures segment		163,007			161,433			159,379			(2,054	)
Other financial liabilities		56,152			54,341			41,750			(12,591	)
Other current liabilities		1,263,944			1,367,527			1,257,852			(109,675	)
Total current liabilities		6,149,340			7,353,604			7,603,456			249,852
Non-current liabilities:
Long-term debt		939,030			1,053,636			1,044,969			(8,667	)
Defined benefit liabilities		329,621			267,222			261,444			(5,778	)
Deferred tax liabilities		1,041,156			816,587			853,135			36,548
Future insurance policy benefits and other		6,519,577			6,614,585			6,708,960			94,375
Policyholders’ account in the life insurance business		3,640,010			4,328,894			4,469,224			140,330
Participation and residual liabilities in the Pictures segment		119,702			116,537			121,791			5,254
Other financial liabilities		146,834			139,417			161,205			21,788
Other non-current liabilities		87,320			93,022			96,495			3,473
Total non-current liabilities		12,823,250			13,429,900			13,717,223			287,323
Total liabilities		18,972,590			20,783,504			21,320,679			537,175
EQUITY
Sony Group Corporation’s stockholders’ equity:
Common stock		880,214			880,214			880,214			–
Additional paid-in capital		1,297,554			1,489,597			1,475,112			(14,485	)
Retained earnings		1,949,697			2,914,503			3,087,094			172,591
Accumulated other comprehensive income		979,476			1,520,257			1,588,475			68,218
Treasury stock, at cost		(232,503	)		(124,228	)		(127,699	)		(3,471	)
Equity attributable to Sony Group Corporation’s stockholders		4,874,438			6,680,343			6,903,196			222,853
Noncontrolling interests		1,120,038			43,996			45,814			1,818
Total equity		5,994,476			6,724,339			6,949,010			224,671
Total liabilities and equity		24,967,066			27,507,843			28,269,689			761,846

F-2

Condensed Consolidated Statements of Income

	Yen in millions
	Three months ended June 30
	2020			2021			Change
Sales and financial services revenue:
Sales		1,524,960			1,844,713			319,753
Financial services revenue		437,989			412,130			(25,859	)
Total sales and financial services revenue		1,962,949			2,256,843			293,894
Costs and expenses:
Cost of sales		1,049,423			1,248,773			199,350
Selling, general and administrative		300,285			345,302			45,017
Financial services expenses		401,904			388,069			(13,835	)
Other operating (income) expense, net		(10,690	)		(1,101	)		9,589
Total costs and expenses		1,740,922			1,981,043			240,121
Share of profit (loss) of investments accounted for using the equity method		(302	)		4,268			4,570
Operating income		221,725			280,068			58,343
Financial income		56,676			11,685			(44,991	)
Financial expenses		9,839			8,543			(1,296	)
Income before income taxes		268,562			283,210			14,648
Income taxes		64,344			70,095			5,751
Net income		204,218			213,115			8,897
Net income attributable to
Sony Group Corporation’s stockholders		193,583			211,829			18,246
Noncontrolling interests		10,635			1,286			(9,349	)

	Yen
	Three months ended June 30
	2020		2021		Change
Per share data:
Net income attributable to Sony Group Corporation’s stockholders
- Basic		158.59		170.95		12.36
- Diluted		155.27		169.22		13.95

F-3

Condensed Consolidated Statements of Comprehensive Income

	Yen in millions
	Three months ended June 30
	2020			2021			Change
Net income		204,218			213,115			8,897
Other comprehensive income, net of tax -
Items that will not be reclassified to profit or loss
Changes in equity instruments measured at fair value through other comprehensive income		40,098			26,370			(13,728	)
Remeasurement of defined benefit pension plans		(39	)		(1,697	)		(1,658	)
Share of other comprehensive income of investments accounted for using the equity method		36			(14	)		(50	)
Items that may be reclassified subsequently to profit or loss
Changes in debt instruments measured at fair value through other comprehensive income		(67,858	)		34,994			102,852
Cash flow hedges		(260	)		(198	)		62
Insurance contract valuation adjustments		(1,650	)		285			1,935
Exchange differences on translating foreign operations		793			7,184			6,391
Share of other comprehensive income of investments accounted for using the equity method		(67	)		(31	)		36
Total other comprehensive income, net of tax		(28,947	)		66,893			95,840
Comprehensive income		175,271			280,008			104,737
Comprehensive income attributable to
Sony Group Corporation’s stockholders		190,143			278,349			88,206
Noncontrolling interests		(14,872	)		1,659			16,531

F-4

Condensed Consolidated Statements of Changes in Stockholders’ Equity

	Yen in millions
	Common stock	Additional paid-in capital		Retained earnings		Accumulated other comprehensive income		Treasury stock, at cost		Sony Group Corporation’s stockholders’ equity		Noncontrolling interests		Total equity
Balance at April 1, 2020	880,214	1,297,554		1,949,697		979,476		(232,503	)	4,874,438		1,120,038		5,994,476
Comprehensive income:
Net income				193,583						193,583		10,635		204,218
Other comprehensive income, net of tax						(3,440	)			(3,440	)	(25,507	)	(28,947	)
Total comprehensive income				193,583		(3,440	)			190,143		(14,872	)	175,271
Transfer to retained earnings				178		(178	)			-				–
Transactions with stockholders and other:
Exercise of stock acquisition rights		(0	)	(565	)			4,822		4,257				4,257
Conversion of convertible bonds		(143	)	(225	)			2,423		2,055				2,055
Stock-based compensation		(26	)							(26	)			(26	)
Dividends declared				(30,504	)					(30,504	)	(12,467	)	(42,971	)
Purchase of treasury stock								(29	)	(29	)			(29	)
Reissuance of treasury stock		0						0		0				0
Transactions with noncontrolling interests shareholders and other		1,907								1,907		(1,585	)	322
Balance at June 30, 2020	880,214	1,299,292		2,112,164		975,858		(225,287	)	5,042,241		1,091,114		6,133,355

	Yen in millions
	Common stock	Additional paid-in capital		Retained earnings		Accumulated other comprehensive income	Treasury stock, at cost		Sony Group Corporation’s stockholders’ equity		Noncontrolling interests		Total equity
Balance at April 1, 2021	880,214	1,489,597		2,914,503		1,520,257	(124,228	)	6,680,343		43,996		6,724,339
Comprehensive income:
Net income				211,829					211,829		1,286		213,115
Other comprehensive income, net of tax						66,520			66,520		373		66,893
Total comprehensive income				211,829		66,520			278,349		1,659		280,008
Transfer to retained earnings				(1,698	)	1,698			-				–
Transactions with stockholders and other:
Exercise of stock acquisition rights		(1	)	(70	)		1,450		1,379				1,379
Conversion of convertible bonds		(109	)	(293	)		2,626		2,224				2,224
Stock-based compensation		1,447							1,447				1,447
Dividends declared				(37,177	)				(37,177	)	(2,029	)	(39,206	)
Purchase of treasury stock							(7,548	)	(7,548	)			(7,548	)
Reissuance of treasury stock		1					1		2				2
Transactions with noncontrolling interests shareholders and other		(15,823	)						(15,823	)	2,188		(13,635	)
Balance at June 30, 2021	880,214	1,475,112		3,087,094		1,588,475	(127,699	)	6,903,196		45,814		6,949,010

F-5

Condensed Consolidated Statements of Cash Flows

	Yen in millions
	Three months ended June 30
	2020			2021
Cash flows from operating activities:
Income before income taxes		268,562			283,210
Adjustments to reconcile income before income taxes to net cash provided by operating activities:
Depreciation and amortization, including amortization of contract costs		161,513			177,922
Amortization of deferred insurance acquisition costs		5,434			15,042
Other operating (income) expense, net		(10,690	)		(1,101	)
Gain on securities, net (other than Financial Services segment)		(52,650	)		(742	)
Share of loss of investments accounted for using the equity method, net of dividends		3,546			2,250
Change in future insurance policy benefits and other		83,810			95,162
Change in policyholders’ account in the life insurance business, less cash impact		171,276			104,840
Net cash impact of policyholders’ account in the life insurance business		29,789			35,427
Changes in assets and liabilities:
(Increase) decrease in trade receivables and contract assets		26			(74,204	)
Increase in inventories		(25,996	)		(120,542	)
Increase in investments and advances in the Financial Services segment		(539,219	)		(320,192	)
Increase in content assets		(30,011	)		(132,147	)
Increase in deferred insurance acquisition costs		(21,300	)		(26,203	)
Increase in trade payables		163			55,195
Increase in deposits from customers in the banking business		116,592			38,039
Increase in borrowings in the life insurance business and the banking business		195,116			241,847
(Increase) decrease in other financial assets and other current assets		(4,598	)		8,252
Decrease in other financial liabilities and other current liabilities		(138,362	)		(134,060	)
Income taxes paid		(61,193	)		(65,753	)
Other		10,957			16,492
Net cash provided by operating activities		162,765			198,734

(Continued on the following page.)

F-6

Condensed Consolidated Statements of Cash Flows (Continued)

	Yen in millions
	Three months ended June 30
	2020			2021
Cash flows from investing activities:
Payments for property, plant and equipment and other intangible assets		(128,100	)		(93,521	)
Proceeds from sales of property, plant and equipment and other intangible assets		3,861			1,356
Payments for investments and advances (other than Financial Services segment)		(48,072	)		(32,045	)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)		13,330			9,328
Payments for purchase of businesses		(1,865	)		(76,155	)
Proceeds from sales of businesses		1,313			6,012
Other		7,168			(6,212	)
Net cash used in investing activities		(152,365	)		(191,237	)
Cash flows from financing activities:
Decrease in short-term borrowings, net		(9,313	)		(4,415	)
Proceeds from issuance of long-term debt		4,178			6,102
Payments of long-term debt		(22,771	)		(23,703	)
Dividends paid		(30,094	)		(36,849	)
Payments for purchase of treasury stock		(29	)		(7,548	)
Other		(9,489	)		(1,029	)
Net cash used in financing activities		(67,518	)		(67,442	)
Effect of exchange rate changes on cash and cash equivalents		(6,496	)		(1,819	)
Net decrease in cash and cash equivalents		(63,614	)		(61,764	)
Cash and cash equivalents at beginning of the fiscal year		1,512,523			1,786,982
Cash and cash equivalents at end of the period		1,448,909			1,725,218

F-7

Notes to Condensed Consolidated Financial Statements

Business Segment Information

(Business Segments)

Segment sales and financial services revenue

	Yen in millions
	Three months ended June 30
	2020			2021			Change
Sales and financial services revenue:
Game & Network Services -
Customers		599,049			602,158			3,109
Intersegment		7,060			13,652			6,592
Total		606,109			615,810			9,701
Music -
Customers		173,735			252,222			78,487
Intersegment		3,380			2,651			(729	)
Total		177,115			254,873			77,758
Pictures -
Customers		174,441			204,378			29,937
Intersegment		648			358			(290	)
Total		175,089			204,736			29,647
Electronics Products & Solutions -
Customers		354,012			566,519			212,507
Intersegment		7,365			9,749			2,384
Total		361,377			576,268			214,891
Imaging & Sensing Solutions -
Customers		198,371			197,885			(486	)
Intersegment		7,815			20,172			12,357
Total		206,186			218,057			11,871
Financial Services -
Customers		437,989			412,130			(25,859	)
Intersegment		2,255			2,255			–
Total		440,244			414,385			(25,859	)
All Other -
Customers		20,445			18,217			(2,228	)
Intersegment		4,855			3,769			(1,086	)
Total		25,300			21,986			(3,314	)
Corporate and elimination		(28,471	)		(49,272	)		(20,801	)
Consolidated total		1,962,949			2,256,843			293,894

Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with Electronics Products & Solutions (“EP&S”).  EP&S intersegment amounts primarily consist of transactions with the G&NS segment.  Imaging & Sensing Solutions (“I&SS”)  intersegment amounts primarily consist of transactions with the G&NS segment and the EP&S segment.  Corporate and elimination includes certain brand and patent royalty income.

F-8

Segment profit (loss)

	Yen in millions
	Three months ended June 30
	2020			2021			Change
Operating income (loss):
Game & Network Services		123,900			83,259			(40,641	)
Music		35,637			55,380			19,743
Pictures		27,044			25,354			(1,690	)
Electronics Products & Solutions		(8,857	)		71,751			80,608
Imaging & Sensing Solutions		26,209			30,479			4,270
Financial Services		35,989			24,013			(11,976	)
All Other		3,520			4,154			634
Total		243,442			294,390			50,948
Corporate and elimination		(21,717	)		(14,322	)		7,395
Consolidated operating income		221,725			280,068			58,343

　　Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.

　　The sales and financial services revenue and operating income (loss) for three months ended June 30, 2020 shown in the table above are presented to reflect the change in the organizational structure for the fiscal year ending March 31, 2022, which is discussed on page F-14.

F-9

(Sales to Customers by Product Category)

　　The following table is a breakdown of sales and financial services revenue to external customers by product category for each segment.  Sony management views each segment as a single operating segment.

	Yen in millions
	Three months ended June 30
Sales and financial services revenue:	2020		2021		Change
Game & Network Services
Digital Software and Add-on Content		394,637		320,436		(74,201	)
Network Services		93,295		101,986		8,691
Hardware and Others		111,117		179,736		68,619
Total		599,049		602,158		3,109
Music
Recorded Music - Streaming		68,900		109,109		40,209
Recorded Music - Others		29,186		42,780		13,594
Music Publishing		31,096		47,132		16,036
Visual Media and Platform		44,553		53,201		8,648
Total		173,735		252,222		78,487
Pictures
Motion Pictures		65,077		79,503		14,426
Television Productions		64,303		61,288		(3,015	)
Media Networks		45,061		63,587		18,526
Total		174,441		204,378		29,937
Electronics Products & Solutions
Televisions		106,568		221,021		114,453
Audio and Video		47,081		73,089		26,008
Still and Video Cameras		46,405		116,410		70,005
Mobile Communications		94,229		81,413		(12,816	)
Other		59,729		74,586		14,857
Total		354,012		566,519		212,507
Imaging & Sensing Solutions		198,371		197,885		(486	)
Financial Services		437,989		412,130		(25,859	)
All Other		20,445		18,217		(2,228	)
Corporate		4,907		3,334		(1,573	)
Consolidated total		1,962,949		2,256,843		293,894

　　

In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software, peripheral devices and first-party software for third-party platforms.  In the Music segment, Recorded Music - Streaming includes the distribution of digital recorded music by streaming; Recorded Music - Others includes the distribution of recorded music by physical media and digital download as well as revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes the production and distribution of animation titles, including game applications based on the animation titles, and various service offerings for music and visual products.  In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of live-action and animated motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide.  In the EP&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.

F-10

(Condensed Financial Services Financial Statements)

　　The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services.  These presentations are not in accordance with IFRS, which is used by Sony to prepare its condensed 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 condensed consolidated financial statements.  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.  The condensed consolidated financial statements column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.

Condensed Statements of Financial Position

	Yen in millions
	Financial Services						Sony without Financial Services						Consolidated
	April 1, 2020		March 31, 2021		June 30, 2021		April 1, 2020		March 31, 2021		June 30, 2021		April 1, 2020		March 31, 2021		June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	¥	550,039	¥	497,218	¥	661,590	¥	962,484	¥	1,289,764	¥	1,063,628	¥	1,512,523	¥	1,786,982	¥	1,725,218
Investments and advances in the Financial Services segment		327,092		411,982		390,918		–		–		–		327,092		411,982		390,918
Trade and other receivables, and contract assets		115,592		119,791		127,365		1,086,457		1,261,321		1,327,671		1,194,334		1,365,493		1,441,588
Inventories		–		–		–		559,779		636,668		758,041		559,779		636,668		758,041
Other financial assets		79,721		73,349		47,735		55,762		44,498		51,337		135,482		117,682		98,906
Other current assets		51,765		51,147		61,979		390,915		357,582		414,206		441,974		396,210		437,308
Total current assets		1,124,209		1,153,487		1,289,587		3,055,397		3,589,833		3,614,883		4,171,184		4,715,017		4,851,979
Non-current assets:
Investments accounted for using the equity method		–		–		–		204,291		225,086		227,001		204,291		225,086		227,001
Investments and advances in the Financial Services segment		16,352,285		17,296,546		17,680,447		–		–		–		16,352,285		17,296,546		17,680,447
Investments in Financial Services, at cost		–		–		–		153,968		550,483		550,483		–		–		–
Property, plant and equipment		18,256		19,260		19,067		899,185		971,336		1,033,928		917,198		990,541		1,052,944
Right-of-use assets		57,892		65,775		67,459		315,431		292,262		302,943		373,282		358,034		370,399
Goodwill and intangible assets, including content assets		62,660		66,133		65,710		1,998,413		2,113,578		2,215,252		2,061,073		2,179,711		2,280,962
Deferred insurance acquisition costs		187,904		623,986		636,679		–		–		–		187,904		623,986		636,679
Deferred tax assets		8,129		–		–		202,217		309,341		254,311		210,333		215,669		193,736
Other financial assets		34,319		28,043		23,903		291,373		671,683		733,508		321,721		695,764		753,449
Other non-current assets		87,933		86,287		86,048		155,643		195,713		210,285		167,795		207,489		222,093
Total non-current assets		16,809,378		18,186,030		18,579,313		4,220,521		5,329,482		5,527,711		20,795,882		22,792,826		23,417,710
Total assets	¥	17,933,587	¥	19,339,517	¥	19,868,900	¥	7,275,918	¥	8,919,315	¥	9,142,594	¥	24,967,066	¥	27,507,843	¥	28,269,689
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	768,100	¥	1,160,896	¥	1,422,745	¥	154,884	¥	246,257	¥	244,095	¥	922,968	¥	1,407,153	¥	1,666,838
Trade and other payables		43,975		80,189		50,468		1,273,946		1,531,502		1,645,105		1,310,536		1,596,563		1,682,260
Deposits from customers in the banking business		2,347,387		2,682,156		2,717,538		–		–		–		2,347,387		2,682,156		2,717,538
Income taxes payables		22,509		5,407		3,237		62,837		79,024		74,602		85,346		84,431		77,839
Participation and residual liabilities in the Pictures segment		–		–		–		163,007		161,433		159,379		163,007		161,433		159,379
Other financial liabilities		44,668		29,106		28,597		11,484		25,235		13,153		56,152		54,341		41,750
Other current liabilities		179,652		192,728		224,490		1,085,330		1,187,975		1,072,543		1,263,944		1,367,527		1,257,852
Total current liabilities		3,406,291		4,150,482		4,447,075		2,751,488		3,231,426		3,208,877		6,149,340		7,353,604		7,603,456
Non-current liabilities:
Long-term debt		276,409		361,106		342,744		662,644		692,531		702,224		939,030		1,053,636		1,044,969
Defined benefit liabilities		34,856		35,293		35,553		294,765		231,929		225,891		329,621		267,222		261,444
Deferred tax liabilities		879,683		802,830		802,837		176,839		122,489		125,932		1,041,156		816,587		853,135
Future insurance policy benefits and other		6,519,577		6,614,585		6,708,960		–		–		–		6,519,577		6,614,585		6,708,960
Policyholders’ account in the life insurance business		3,640,010		4,328,894		4,469,224		–		–		–		3,640,010		4,328,894		4,469,224
Participation and residual liabilities in the Pictures segment		–		–		–		119,702		116,537		121,791		119,702		116,537		121,791
Other financial liabilities		115,949		109,537		109,375		33,399		32,446		54,412		146,834		139,417		161,205
Other non-current liabilities		4,217		5,309		5,360		106,693		109,808		112,938		87,320		93,022		96,495
Total non-current liabilities		11,470,701		12,257,554		12,474,053		1,394,042		1,305,740		1,343,188		12,823,250		13,429,900		13,717,223
Total liabilities		14,876,992		16,408,036		16,921,128		4,145,530		4,537,166		4,552,065		18,972,590		20,783,504		21,320,679
Equity:
Stockholders’ equity of Financial Services		3,054,361		2,928,525		2,944,694		–		–		–		–		–		–
Stockholders’ equity of Sony without Financial Services		–		–		–		3,084,820		4,341,109		4,547,793		–		–		–
Sony Group Corporation’s stockholders’ equity		–		–		–		–		–		–		4,874,438		6,680,343		6,903,196
Noncontrolling interests		2,234		2,956		3,078		45,568		41,040		42,736		1,120,038		43,996		45,814
Total equity		3,056,595		2,931,481		2,947,772		3,130,388		4,382,149		4,590,529		5,994,476		6,724,339		6,949,010
Total liabilities and equity	¥	17,933,587	¥	19,339,517	¥	19,868,900	¥	7,275,918	¥	8,919,315	¥	9,142,594	¥	24,967,066	¥	27,507,843	¥	28,269,689

F-11

Condensed Statements of Income

	Yen in millions
	Three months ended June 30
	Financial Services				Sony without Financial Services						Consolidated
	2020		2021		2020			2021			2020			2021
Sales	¥	–	¥	–	¥	1,526,437		¥	1,845,785		¥	1,524,960		¥	1,844,713
Financial services revenue		440,244		414,385		–			–			437,989			412,130
Total sales and financial services revenue		440,244		414,385		1,526,437			1,845,785			1,962,949			2,256,843
Cost of sales		–		–		1,052,065			1,251,199			1,049,423			1,248,773
Selling, general and administrative		–		–		299,126			343,948			300,285			345,302
Financial services expenses		404,159		390,324		–			–			401,904			388,069
Other operating (income) expense, net		96		48		(10,786	)		(1,149	)		(10,690	)		(1,101	)
Total costs and expenses		404,255		390,372		1,340,405			1,593,998			1,740,922			1,981,043
Share of profit (loss) of investments accounted for using the equity method		–		–		(302	)		4,268			(302	)		4,268
Operating income		35,989		24,013		185,730			256,055			221,725			280,068
Financial income (expenses), net		–		–		66,651			42,300			46,837			3,142
Income before income taxes		35,989		24,013		252,381			298,355			268,562			283,210
Income taxes		9,841		3,740		54,507			66,354			64,344			70,095
Net income		26,148		20,273		197,874			232,001			204,218			213,115
Net income of Financial Services	¥	26,073	¥	20,152	¥	–		¥	–		¥	–		¥	–
Net income of Sony without Financial Services	¥	–	¥	–	¥	196,424		¥	230,836		¥	–		¥	–
Net income attributable to Sony Group Corporation’s stockholders	¥	–	¥	–	¥	–		¥	–		¥	193,583		¥	211,829
Net income attributable to noncontrolling interests	¥	75	¥	121	¥	1,450		¥	1,165		¥	10,635		¥	1,286

F-12

Condensed Statements of Cash Flows

	Yen in millions
	Three months ended June 30
	Financial Services						Sony without Financial Services						Consolidated
	2020			2021			2020			2021			2020			2021
Cash flows from operating activities:
Income (loss) before income taxes	¥	35,989		¥	24,013		¥	252,381		¥	298,355		¥	268,562		¥	283,210
Adjustments to reconcile income (loss) before income taxes to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of contract costs		5,757			6,243			155,756			171,679			161,513			177,922
Amortization of deferred insurance acquisition costs		5,434			15,042			–			–			5,434			15,042
Other operating (income) expense, net		96			48			(10,786	)		(1,149	)		(10,690	)		(1,101	)
(Gain) loss on securities, net (other than Financial Services segment)		–			–			(52,650	)		(742	)		(52,650	)		(742	)
Change in future insurance policy benefits and other		83,810			95,162			–			–			83,810			95,162
Change in policyholders’ account in the life insurance business, less cash impact		171,276			104,840			–			–			171,276			104,840
Net cash impact of policyholders’ account in the life insurance business		29,789			35,427			–			–			29,789			35,427
Changes in assets and liabilities:								–			–			–			–
(Increase) decrease in trade receivables and contract assets		(20,294	)		(11,256	)		14,469			(60,778	)		26			(74,204	)
(Increase) decrease in inventories		–			–			(25,996	)		(120,542	)		(25,996	)		(120,542	)
(Increase) decrease in investments and advances in the financial services business		(539,219	)		(320,192	)		–			–			(539,219	)		(320,192	)
(Increase) decrease in content assets		–			–			(30,011	)		(132,147	)		(30,011	)		(132,147	)
(Increase) decrease in deferred insurance acquisition costs		(21,300	)		(26,203	)		-			–			(21,300	)		(26,203	)
Increase (decrease) in trade payables		(1,149	)		(27,252	)		1,312			80,632			163			55,195
Increase (decrease) in deposits from customers in the banking business		116,592			38,039			–						116,592			38,039
Increase (decrease) in borrowings in the life insurance business and the banking business		195,116			241,847			–			–			195,116			241,847
Other		(13,960	)		36,128			(169,371	)		(209,134	)		(189,650	)		(172,819	)
Net cash provided by (used in) operating activities		47,937			211,886			135,104			26,174			162,765			198,734
Cash flows from investing activities:
Payments for property, plant and equipment and other intangible assets		(5,674	)		(5,580	)		(122,491	)		(87,941	)		(128,100	)		(93,521	)
Payments for investments and advances (other than Financial Services segment)		–			–			(48,072	)		(32,045	)		(48,072	)		(32,045	)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)		–			–			13,330			9,328			13,330			9,328
Other		108			–			9,979			(74,999	)		10,477			(74,999	)
Net cash provided by (used in) investing activities		(5,566	)		(5,580	)		(147,254	)		(185,657	)		(152,365	)		(191,237	)
Cash flows from financing activities:
Increase (decrease) in borrowings, net		(2,296	)		(2,605	)		(25,618	)		(19,412	)		(27,906	)		(22,016	)
Dividends paid		(30,453	)		(39,159	)		(30,095	)		(36,849	)		(30,094	)		(36,849	)
Other		109			(170	)		1,014			(8,573	)		(9,518	)		(8,577	)
Net cash provided by (used in) financing activities		(32,640	)		(41,934	)		(54,699	)		(64,834	)		(67,518	)		(67,442	)
Effect of exchange rate changes on cash and cash equivalents		–			–			(6,496	)		(1,819	)		(6,496	)		(1,819	)
Net increase (decrease) in cash and cash equivalents		9,731			164,372			(73,345	)		(226,136	)		(63,614	)		(61,764	)
Cash and cash equivalents at beginning of the fiscal year		550,039			497,218			962,484			1,289,764			1,512,523			1,786,982
Cash and cash equivalents at end of the period	¥	559,770		¥	661,590		¥	889,139		¥	1,063,628		¥	1,448,909		¥	1,725,218

F-13

Going Concern Assumption

　　Not Applicable

Accounting Policy and Other Information

(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

	Yen in millions
	Three months ended June 30
	2020		2021
Net income attributable to Sony Group Corporation’s stockholders		193,583		211,829
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
Zero coupon convertible bonds		149		51
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation		193,732		211,880
	Thousands of shares
Weighted-average shares outstanding for basic EPS computation		1,220,629		1,239,162
Effect of dilutive securities:
Stock acquisition rights		3,269		4,914
Zero coupon convertible bonds		23,820		8,046
Weighted-average shares for diluted EPS computation		1,247,718		1,252,122

(Segmentation)

Due to organizational changes as of April 1, 2021, from the first quarter of the fiscal year ending 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.  In connection with these organizational changes, sales and financial services revenue 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 ending March 31, 2022.

The G&NS segment includes network services businesses, the manufacture and sales of home gaming products and the production and sales of software.  The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses.  The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses.  The EP&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and internet-related service business.  The I&SS segment includes the image sensors business.  The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and the banking business in Japan.  All Other consists of various operating activities, including the disc manufacturing and recording media businesses.  Sony’s products and services are generally unique to a single operating segment.

F-14

First-Time Adoption

  Sony has disclosed its condensed consolidated financial statements under IFRS from the first quarter of the fiscal year ending March 31, 2022.  The latest consolidated financial statements under generally accepted accounting principles in the United States (“U.S. GAAP”) were prepared for the fiscal year ended March 31, 2021, and the date of transition to IFRS was April 1, 2020.

(1)  Exemption under IFRS 1 “First-Time Adoption of International Financial Reporting Standards” (“IFRS 1”)

　　IFRS 1 requires that a company adopting IFRS for the first-time (“first-time adopters”) shall apply IFRS retrospectively.  However, IFRS 1 provides certain exemptions that allow first-time adopters to choose not to apply certain standards retrospectively.  Sony has adopted the following exemptions:

Business combinations

　　First-time adopters may choose not to apply IFRS 3 “Business Combinations” (“IFRS 3”) retrospectively to business combinations that occurred before the date of transition to IFRS.  Sony has applied this exemption and chosen not to apply IFRS 3 retrospectively to business combinations that occurred before the date of transition to IFRS.  Therefore, the carrying amounts of goodwill generated in business combinations that occurred prior to the date of transition to IFRS were based on the carrying amounts determined under U.S. GAAP at the date of transition to IFRS.

　　Sony performed an impairment test on goodwill at the date of transition to IFRS regardless of whether there were any indications that the goodwill may be impaired.

Exchange differences on translating foreign operations

　　First-time adopters may choose to deem the cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS.  Sony has chosen to apply this exemption and deemed all cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS.

Designation of financial instruments recognized before the date of transition to IFRS

　　First-time adopters may designate an investment in an equity instrument as an investment recognized at fair value through other comprehensive income in accordance with IFRS 9 “Financial Instruments” based on the facts and circumstances that existed at the date of transition to IFRS.  Sony has applied this exemption and designated some equity instruments at fair value in other comprehensive income at the date of transition to IFRS.

Recognition of right-of-use assets and lease liabilities

　　When first-time adopters recognize right-of-use assets and lease liabilities as a lessee, they are permitted to measure right-of-use assets and lease liabilities at the date of transition to IFRS.  Sony measured all lease liabilities at the date of transition to IFRS at the present value of the remaining lease payments, discounted using Sony’s incremental borrowing rate at the date of transition to IFRS.  Sony recognized right-of-use assets equal to the amount of lease liabilities at the date of transition to IFRS.

(2)  Mandatory exception under IFRS 1

　　IFRS 1 prohibits the retrospective application of IFRS concerning “estimates”, “non-controlling interests”, “classification and measurement of financial instruments” and other items.  Sony applied these items prospectively from the date of transition to IFRS.

(3)  Reconciliation

　　The reconciliations required to be disclosed in the first IFRS financial statements are described in the reconciliations as below.  “Reclassification” includes items that do not affect retained earnings and comprehensive income, while “Recognition and measurement differences” includes items that affect retained earnings and comprehensive income.

F-15

Reconciliation of equity at the date of transition to IFRS (April 1, 2020)

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP*			Reclassification			Recognition and measurement differences			IFRS		Note	Accounts under IFRS
ASSETS													ASSETS
Current assets:													Current assets:
Cash and cash equivalents		1,512,357			–			166			1,512,523		Cash and cash equivalents
Marketable securities		1,847,772			(1,847,772	)		–			–	a
		–			327,092			–			327,092	a,f	Investments and advances in the Financial Services segment
Notes and accounts receivable, trade and contract assets		1,028,793			(1,028,793	)		–			–	b
		–			1,195,228			(894	)		1,194,334	b,c	Trade and other receivables, and contract assets
Allowance for credit losses		(26,153	)		26,153			–			–	b
Inventories		558,452			-			1,327			559,779		Inventories
Other receivables		188,076			(188,076	)		–			–	c
		–			135,265			217			135,482	d	Other financial assets
Prepaid expenses and other current assets		594,009			(153,473	)		1,438			441,974	d	Other current assets
Total current assets		5,703,306			(1,534,376	)		2,254			4,171,184		Total current assets
													Non-current assets:
Film costs		458,853			(458,853	)		–			–	e
Investments and advances:
Affiliated companies		207,922			(608	)		(3,023	)		204,291		Investments accounted for using the equity method
Securities investments and other		12,526,990			(12,526,990	)		–			–	f
Allowance for credit losses		(6,341	)		6,341			–			–
		–			13,906,535			2,445,750			16,352,285	a,f,D	Investments and advances in the Financial Services segment
Property, plant and equipment:
Land		81,482			(81,482	)		–			–
Buildings		659,556			(659,556	)		–			–
Machinery and equipment		1,725,720			(1,725,720	)		–			–
Construction in progress		76,391			(76,391	)		–			–
Less - Accumulated depreciation		1,634,505			(1,634,505	)		–			–
		–			921,513			(4,315	)		917,198		Property, plant and equipment
Other assets:
Operating lease right-of-use assets		359,510			(359,510	)		–			–	g
Finance lease right-of-use assets		33,100			(33,100	)		–			–	g
		–			376,998			(3,716	)		373,282	g	Right-of-use assets
Intangibles, net		906,310			(906,310	)		–			–	e
Goodwill		783,888			–			(92,959	)		690,929	C	Goodwill
		–			991,611			1,033			992,644	e	Content assets
		–			373,552			3,948			377,500	e	Other intangible assets
Deferred insurance acquisition costs		600,901			–			(412,997	)		187,904	E	Deferred insurance acquisition costs
Deferred income taxes		210,417			87			(171	)		210,333		Deferred tax assets
		–			298,469			23,252			321,721	f,h,D	Other financial assets
Other		339,284			(154,853	)		(16,636	)		167,795	h,B	Other non-current assets
		17,329,478			1,526,238			1,940,166			20,795,882		Total non-current assets
Total assets		23,032,784			(8,138	)		1,942,420			24,967,066		Total assets

F-16

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP*			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
LIABILITIES														LIABILITIES
Current liabilities:														Current liabilities:
Short-term borrowings		810,176			13,869			–			824,045			Short-term borrowings
Current portion of long-term debt		29,807			69,116			–			98,923		i	Current portion of long-term debt
Current portion of long-term operating lease liabilities		68,942			(68,942	)		–			–		i
Notes and accounts payable, trade		380,810			(380,810	)		–			–		j
		–			1,340,573			(30,037	)		1,310,536		j,k,m	Trade and other payables
Accounts payable, other and accrued expenses		1,630,197			(1,630,197	)		–			–		k
Deposits from customers in the banking business		2,440,783			(93,396	)		–			2,347,387		l	Deposits from customers in the banking business
Accrued income and other taxes		145,996			(60,650	)		–			85,346			Income taxes payables
		–			163,007			–			163,007		k	Participation and residual liabilities in the Pictures segment
		–			56,152			–			56,152		k,m	Other financial liabilities
Other		733,732			527,859			2,353			1,263,944		k,m	Other current liabilities
Total current liabilities		6,240,443			(63,419	)		(27,684	)		6,149,340			Total current liabilities
														Non-current liabilities:
Long-term debt		634,966			305,871			(1,807	)		939,030		i	Long-term debt
Long-term operating lease liabilities		314,836			(314,836	)		–			–		i
Accrued pension and severance costs		324,655			4,355			611			329,621		B	Defined benefit liabilities
Deferred income taxes		548,034			87			493,035			1,041,156		F	Deferred tax liabilities
Future insurance policy benefits and other		6,246,047			–			273,530			6,519,577		E	Future insurance policy benefits and other
Policyholders’ account in the life insurance business		3,642,271			–			(2,261	)		3,640,010		E	Policyholders’ account in the life insurance business
		–			122,706			(3,004	)		119,702		n	Participation and residual liabilities in the Pictures segment
		–			146,834			-			146,834		l,n,o	Other financial liabilities
Other		289,285			(201,969	)		4			87,320		n	Other non-current liabilities
		12,000,094			63,048			760,108			12,823,250			Total non-current liabilities
Total liabilities		18,240,537			(371	)		732,424			18,972,590			Total liabilities
Redeemable noncontrolling interest		7,767			(7,767	)		–			–		o
EQUITY														EQUITY
Sony Group Corporation’s stockholders’ equity:														Sony Group Corporation’s stockholders’ equity:
Common stock		880,214			–			–			880,214			Common stock
Additional paid-in capital		1,289,719			–			7,835			1,297,554			Additional paid-in capital
Retained earnings		2,765,187			–			(815,490	)		1,949,697		G	Retained earnings
Accumulated other comprehensive income		(580,980	)		–			1,560,456			979,476		A,B,D,E,F	Accumulated other comprehensive income
Treasury stock, at cost		(232,503	)		-			–			(232,503	)		Treasury stock, at cost
		4,121,637			–			752,801			4,874,438			Equity attributable to Sony Group Corporation’s stockholders
Noncontrolling interests		662,843			–			457,195			1,120,038		F	Noncontrolling interests
Total equity		4,784,480			–			1,209,996			5,994,476			Total equity
Total liabilities and equity		23,032,784			(8,138	)		1,942,420			24,967,066			Total liabilities and equity

* “U.S. GAAP” represents the consolidated financial statements under U.S. GAAP for the year ended March 31, 2020, adjusted for the adoption of the Accounting Standards Updates issued by the Financial Accounting Standards Board effective as of April 1, 2020.

F-17

Reconciliation of equity as of June 30, 2020

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS		Note	Accounts under IFRS
ASSETS													ASSETS
Current assets:													Current assets:
Cash and cash equivalents		1,448,614			–			295			1,448,909		Cash and cash equivalents
Marketable securities		2,105,977			(2,105,977	)		–			–	a
		–			378,857			7			378,864	a,f	Investments and advances in the Financial Services segment
Notes and accounts receivable, trade and contract assets		1,005,429			(1,005,429	)		–			–	b
		–			1,194,949			(1,081	)		1,193,868	b,c	Trade and other receivables, and contract assets
Allowance for credit losses		(26,060	)		26,060			–			–	b
Inventories		588,797			–			(273	)		588,524		Inventories
Other receivables		179,568			(179,568	)		–			-	c
		–			106,594			217			106,811	d	Other financial assets
Prepaid expenses and other current assets		608,271			(153,041	)		(5,244	)		449,986	d	Other current assets
Total current assets		5,910,596			(1,737,555	)		(6,079	)		4,166,962		Total current assets
													Non-current assets:
Film costs		417,646			(417,646	)		–			–	e
Investments and advances:
Affiliated companies		210,800			(666	)		(2,727	)		207,407		Investments accounted for using the equity method
Securities investments and other		12,937,934			(12,937,934	)		–			–	f
Allowance for credit losses		(7,677	)		7,677			–			–
		–			14,357,344			2,099,941			16,457,285	a,f,D	Investments and advances in the Financial Services segment
Property, plant and equipment:
Land		79,860			(79,860	)		–			–
Buildings		658,911			(658,911	)		–			–
Machinery and equipment		1,792,832			(1,792,832	)		–			–
Construction in progress		71,599			(71,599	)		–			–
Less - Accumulated depreciation		1,677,282			(1,677,282	)		–			–
		–			937,845			(4,290	)		933,555		Property, plant and equipment
Other assets:
Operating lease right-of-use assets		351,828			(351,828	)		–			–	g
Finance lease right-of-use assets		31,778			(31,778	)		–			–	g
		–			369,443			(4,598	)		364,845	g	Right-of-use assets
Intangibles, net		902,575			(902,575	)		–			–	e
Goodwill		783,453			–			(92,732	)		690,721	C	Goodwill
		–			947,891			2,209			950,100	e	Content assets
		–			372,330			3,406			375,736	e	Other intangible assets
Deferred insurance acquisition costs		617,899			–			(396,690	)		221,209	E	Deferred insurance acquisition costs
Deferred income taxes		202,880			(496	)		(7,086	)		195,298		Deferred tax assets
		–			458,685			30,013			488,698	f,h,D	Other financial assets
Other		340,724			(147,807	)		(11,252	)		181,665	h,B	Other non-current assets
		17,715,760			1,734,565			1,616,194			21,066,519		Total non-current assets
Total assets		23,626,356			(2,990	)		1,610,115			25,233,481		Total assets

F-18

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
LIABILITIES														LIABILITIES
Current liabilities:														Current liabilities:
Short-term borrowings		977,414			13,908			–			991,322			Short-term borrowings
Current portion of long-term debt		28,516			72,450			–			100,966		i	Current portion of long-term debt
Current portion of long-term operating lease liabilities		72,275			(72,275	)		–			–		i
Notes and accounts payable, trade		391,223			(391,223	)		–			–		j
		–			1,278,571			(308	)		1,278,263		j,k,m	Trade and other payables
Accounts payable, other and accrued expenses		1,461,252			(1,461,252	)		–			–		k
Deposits from customers in the banking business		2,558,346			(87,579	)		–			2,470,767		l	Deposits from customers in the banking business
Accrued income and other taxes		148,208			(73,992	)		(6,244	)		67,972			Income taxes payables
		–			158,429			(1,935	)		156,494		k	Participation and residual liabilities in the Pictures segment
		–			50,281			–			50,281		k,m,o	Other financial liabilities
Other		692,863			460,792			(5,886	)		1,147,769		k,m	Other current liabilities
Total current liabilities		6,330,097			(51,890	)		(14,373	)		6,263,834			Total current liabilities
														Non-current liabilities:
Long-term debt		654,145			295,868			(1,641	)		948,372		i	Long-term debt
Long-term operating lease liabilities		304,647			(304,647	)		–			–		i
Accrued pension and severance costs		320,439			3,837			3,009			327,285		B	Defined benefit liabilities
Deferred income taxes		556,206			(496	)		482,120			1,037,830		F	Deferred tax liabilities
Future insurance policy benefits and other		6,331,757			-			3,727			6,335,484		E	Future insurance policy benefits and other
Policyholders’ account in the life insurance business		3,843,393			-			(2,318	)		3,841,075		E	Policyholders’ account in the life insurance business
		-			124,463			(2,998	)		121,465		n	Participation and residual liabilities in the Pictures segment
		-			134,532			-			134,532		l,n,o	Other financial liabilities
Other		283,852			(194,741	)		1,138			90,249		n	Other non-current liabilities
		12,294,439			58,816			483,037			12,836,292			Total non-current liabilities
Total liabilities		18,624,536			6,926			468,664			19,100,126			Total liabilities
Redeemable noncontrolling interest		9,916			(9,916	)		–			–		o
EQUITY														EQUITY
Sony Group Corporation’s stockholders’ equity:														Sony Group Corporation’s stockholders’ equity:
Common stock		880,214			–			–			880,214			Common stock
Additional paid-in capital		1,290,992			–			8,300			1,299,292			Additional paid-in capital
Retained earnings		2,997,579			–			(885,415	)		2,112,164		G	Retained earnings
Accumulated other comprehensive income		(612,648	)		–			1,588,506			975,858		A,B,C,D,E,F	Accumulated other comprehensive income
Treasury stock, at cost		(225,287	)		–			–			(225,287	)		Treasury stock, at cost
		4,330,850			–			711,391			5,042,241			Equity attributable to Sony Group Corporation’s stockholders
Noncontrolling interests		661,054			–			430,060			1,091,114		F	Noncontrolling interests
Total equity		4,991,904			–			1,141,451			6,133,355			Total equity
Total liabilities and equity		23,626,356			(2,990	)		1,610,115			25,233,481			Total liabilities and equity

F-19

Reconciliation of equity as of March 31, 2021

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS		Note	Accounts under IFRS
ASSETS													ASSETS
Current assets:													Current assets:
Cash and cash equivalents		1,786,982			–			–			1,786,982		Cash and cash equivalents
Marketable securities		2,902,438			(2,902,438	)		–			–	a,p
		–			412,016			(34	)		411,982	a,f	Investments and advances in the Financial Services segment
Notes and accounts receivable, trade and contract assets		1,099,300			(1,099,300	)		–			–	b
		–			1,366,991			(1,498	)		1,365,493	b,c	Trade and other receivables, and contract assets
Allowance for credit losses		(29,406	)		29,406			–			–	b
Inventories		637,391			–			(723	)		636,668		Inventories
Other receivables		283,499			(283,499	)		–			–	c
		–			117,522			160			117,682	d	Other financial assets
Prepaid expenses and other current assets		538,540			(141,517	)		(813	)		396,210	d	Other current assets
Total current assets		7,218,744			(2,500,819	)		(2,908	)		4,715,017		Total current assets
													Non-current assets:
Film costs		459,426			(459,426	)		–			–	e
Investments and advances:
Affiliated companies		226,218			(1,132	)		–			225,086		Investments accounted for using the equity method
Securities investments and other		14,046,196			(14,046,196	)		–			–	f
Allowance for credit losses		(8,419	)		8,419			–			–
		–			15,639,456			1,657,090			17,296,546	a,f,D	Investments and advances in the Financial Services segment
Property, plant and equipment:
Land		79,557			(79,557	)		–			–
Buildings		683,249			(683,249	)		–			–
Machinery and equipment		1,748,961			(1,748,961	)		–			–
Construction in progress		100,728			(100,728	)		-			–
Less - Accumulated depreciation		1,627,061			(1,627,061	)		–			–
		–			994,676			(4,135	)		990,541		Property, plant and equipment
Other assets:
Operating lease right-of-use assets		337,322			(337,322	)		–			–	g
Finance lease right-of-use assets		39,772			(39,772	)		–			–	g
		–			365,641			(7,607	)		358,034	g	Right-of-use assets
Intangibles, net		996,305			(996,305	)		–			–	e
Goodwill		827,149			(398	)		(100,642	)		726,109	C	Goodwill
		–			1,062,865			(318	)		1,062,547	e	Content assets
		–			392,862			(1,807	)		391,055	e	Other intangible assets
Deferred insurance acquisition costs		657,420			–			(33,434	)		623,986	E	Deferred insurance acquisition costs
Deferred income taxes		207,470			(2,649	)		10,848			215,669		Deferred tax assets
		–			663,105			32,659			695,764	f,h,D	Other financial assets
Other		361,803			(137,916	)		(16,398	)		207,489	h,B	Other non-current assets
		19,136,096			2,120,474			1,536,256			22,792,826		Total non-current assets
Total assets		26,354,840			(380,345	)		1,533,348			27,507,843		Total assets

F-20

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
LIABILITIES														LIABILITIES
Current liabilities:														Current liabilities:
Short-term borrowings		1,187,868			13,879			–			1,201,747			Short-term borrowings
Current portion of long-term debt		131,699			73,582			125			205,406		i	Current portion of long-term debt
Current portion of long-term operating lease liabilities		73,362			(73,362	)		–			–		i
Notes and accounts payable, trade		599,569			(599,569	)		–			–		j
		–			1,632,952			(36,389	)		1,596,563		j,k,m	Trade and other payables
Accounts payable, other and accrued expenses		1,756,833			(1,756,833	)		–			–		k
Deposits from customers in the banking business		2,773,885			(91,729	)		–			2,682,156		l	Deposits from customers in the banking business
Accrued income and other taxes		165,406			(82,594	)		1,619			84,431			Income taxes payables
		–			164,005			(2,572	)		161,433		k	Participation and residual liabilities in the Pictures segment
		–			54,341			–			54,341		k,m,o	Other financial liabilities
Other		1,126,802			234,441			6,284			1,367,527		k,m,p	Other current liabilities
Total current liabilities		7,815,424			(430,887	)		(30,933	)		7,353,604			Total current liabilities
														Non-current liabilities:
Long-term debt		773,294			281,086			(744	)		1,053,636		i	Long-term debt
Long-term operating lease liabilities		290,259			(290,259	)		-			–		i
Accrued pension and severance costs		254,103			12,364			755			267,222		B	Defined benefit liabilities
Deferred income taxes		366,761			(2,649	)		452,475			816,587		F	Deferred tax liabilities
Future insurance policy benefits and other		6,599,977			–			14,608			6,614,585		E	Future insurance policy benefits and other
Policyholders’ account in the life insurance business		4,331,065			–			(2,171	)		4,328,894		E	Policyholders’ account in the life insurance business
		–			120,712			(4,175	)		116,537		n	Participation and residual liabilities in the Pictures segment
		–			139,417			–			139,417		l,n,o	Other financial liabilities
Other		294,302			(201,551	)		271			93,022		n	Other non-current liabilities
		12,909,761			59,120			461,019			13,429,900			Total non-current liabilities
Total liabilities		20,725,185			(371,767	)		430,086			20,783,504			Total liabilities
Redeemable noncontrolling interest		8,179			(8,179	)		–			–		o
EQUITY														EQUITY
Sony Group Corporation’s stockholders’ equity:														Sony Group Corporation’s stockholders’ equity:
Common stock		880,214			–			–			880,214			Common stock
Additional paid-in capital		1,486,721			–			2,876			1,489,597			Additional paid-in capital
Retained earnings		3,857,152			–			(942,649	)		2,914,503		G	Retained earnings
Accumulated other comprehensive income		(524,020	)		–			2,044,277			1,520,257		A,B,C,D,E,F	Accumulated other comprehensive income
Treasury stock, at cost		(124,228	)		–			–			(124,228	)		Treasury stock, at cost
		5,575,839			–			1,104,504			6,680,343			Equity attributable to Sony Group Corporation’s stockholders
Noncontrolling interests		45,637			(399	)		(1,242	)		43,996			Noncontrolling interests
Total equity		5,621,476			(399	)		1,103,262			6,724,339			Total equity
Total liabilities and equity		26,354,840			(380,345	)		1,533,348			27,507,843			Total liabilities and equity

F-21

Reconciliation of profit or loss for three months ended June 30, 2020

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
Sales and operating revenue:														Sales and financial services revenue:
Net sales		1,504,870			19,132			958			1,524,960		q	Sales
Financial services revenue		444,916			3,448			(10,375	)		437,989		r,D	Financial services revenue
Other operating revenue		19,133			(19,133	)		–			–		q
		1,968,919			3,447			(9,417	)		1,962,949			Total sales and financial services revenue
Costs and expenses:														Costs and expenses:
Cost of sales		1,052,673			(8	)		(3,242	)		1,049,423			Cost of sales
Selling, general and administrative		301,166			158			(1,039	)		300,285		B	Selling, general and administrative
Financial services expenses		397,659			3,461			784			401,904		r	Financial services expenses
Other operating income, net		(11,248	)		–			558			(10,690	)		Other operating (income) expense, net
		1,740,250			3,611			(2,939	)		1,740,922			Total costs and expenses
Equity in net loss of affiliated companies		(274	)		–			(28	)		(302	)	D	Share of profit (loss) of investments accounted for using the equity method
Operating income		228,395			(164	)		(6,506	)		221,725			Operating income
Other income:
Interest and dividends		2,836			(2,836	)		–			–
Gain on equity securities, net		96,900			(96,900	)		–			–
Other		1,273			(1,273	)		–			–
		–			100,688			(44,012	)		56,676		s,D	Financial income
Other expenses:
Interest expenses		1,805			(1,805	)		–			–
Foreign exchange loss, net		5,054			(5,054	)		–			–
Other		2,626			(2,626	)		–			–
		–			9,000			839			9,839		s,B	Financial expenses
Income before income taxes		319,919			–			(51,357	)		268,562		H	Income before income taxes
Income taxes		72,878			–			(8,534	)		64,344		I	Income taxes
Net income		247,041			–			(42,823	)		204,218			Net income
														Net income attributable to
Net income attributable to Sony Group Corporation’s stockholders		233,251			–			(39,668	)		193,583			Sony Group Corporation’s stockholders
Net income attributable to noncontrolling interests		13,790			–			(3,155	)		10,635			Noncontrolling interests

F-22

Reconciliation of comprehensive income for three months ended June 30, 2020

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
Net income		247,041			–			(42,823	)		204,218			Net income
Other comprehensive income, net of tax -														Other comprehensive income, net of tax -
														Items that will not be reclassified to profit or loss
		–			–			40,098			40,098		D	Changes in equity instruments measured at fair value through other comprehensive income
Pension liability adjustment		566			–			(605	)		(39	)		Remeasurement of defined benefit pension plans
		–			–			36			36			Share of other comprehensive income of investments accounted for using the equity method
														Items that may be reclassified subsequently to profit or loss
Unrealized losses on securities		(32,111	)		–			(35,747	)		(67,858	)	D,E,F	Changes in debt instruments measured at fair value through other comprehensive income
Unrealized losses on derivative instruments		(260	)		–			–			(260	)		Cash flow hedges
Debt valuation adjustments		(1,650	)		–			–			(1,650	)		Insurance contract valuation adjustments
Foreign currency translation adjustments		(11,483	)		67			12,209			793			Exchange differences on translating foreign operations
		-			(67	)		–			(67	)		Share of other comprehensive income of investments accounted for using the equity method
		(44,938	)		–			15,991			(28,947	)		Total other comprehensive income, net of tax
Total comprehensive income		202,103			–			(26,832	)		175,271			Comprehensive income
														Comprehensive income attributable to
Comprehensive income attributable to Sony Group Corporation’s stockholders		201,583			–			(11,440	)		190,143			Sony Group Corporation’s stockholders
Comprehensive income attributable to noncontrolling interests		520			–			(15,392	)		(14,872	)		Noncontrolling interests

F-23

Reconciliation of profit or loss for the fiscal year ended March 31, 2021

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP		Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
Sales and operating revenue:													Sales and financial services revenue:
Net sales		7,252,766		79,293			1,611			7,333,670		q	Sales
Financial services revenue		1,661,520		13,512			(10,041	)		1,664,991		r,D	Financial services revenue
Other operating revenue		85,074		(85,074	)		–			–		q
		8,999,360		7,731			(8,430	)		8,998,661			Total sales and financial services revenue
Costs and expenses:													Costs and expenses:
Cost of sales		5,072,596		(3,850	)		(2,867	)		5,065,879		B	Cost of sales
Selling, general and administrative		1,469,955		61			3,138			1,473,154		B	Selling, general and administrative
Financial services expenses		1,488,963		12,503			208			1,501,674		r,D	Financial services expenses
Other operating expense, net		7,468		(720	)		7,502			14,250		C	Other operating (income) expense, net
		8,038,982		7,994			7,981			8,054,957			Total costs and expenses
Equity in net income of affiliated companies		11,487		–			64			11,551		D	Share of profit (loss) of investments accounted for using the equity method
Operating income		971,865		(263	)		(16,347	)		955,255			Operating income
Other income:
Interest and dividends		10,457		(10,457	)		–			–
Gain on equity securities, net		247,026		(247,026	)		–			–
Other		6,752		(6,752	)		–			–
		–		264,692			(180,900	)		83,792		s,D	Financial income
Other expenses:
Interest expenses		12,185		(12,185	)		–			–
Foreign exchange loss, net		16,056		(16,056	)		–			–
Net periodic benefit costs other than service cost		8,811		(8,811	)		–			–
Other		6,678		(6,678	)		–			–
		–		43,924			(2,842	)		41,082		s,B	Financial expenses
Income before income taxes		1,192,370		–			(194,405	)		997,965		H	Income before income taxes
Income taxes		995		–			(46,926	)		(45,931	)	I	Income taxes
Net income		1,191,375		–			(147,479	)		1,043,896			Net income
													Net income attributable to
Net income attributable to Sony Group Corporation’s stockholders		1,171,776		–			(142,166	)		1,029,610			Sony Group Corporation’s stockholders
Net income attributable to noncontrolling interests		19,599		–			(5,313	)		14,286			Noncontrolling interests

F-24

Reconciliation of comprehensive income for the fiscal year ended March 31, 2021

	Yen in millions
Accounts under U.S. GAAP	U.S. GAAP			Reclassification			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
Net income		1,191,375			–			(147,479	)		1,043,896			Net income
Other comprehensive income, net of tax -														Other comprehensive income, net of tax -
														Items that will not be reclassified to profit or loss
		–			–			144,740			144,740		D	Changes in equity instruments measured at fair value through other comprehensive income
Pension liability adjustment		12,965			–			(1,410	)		11,555			Remeasurement of defined benefit pension plans
		–			–			87			87			Share of other comprehensive income of investments accounted for using the equity method
														Items that may be reclassified subsequently to profit or loss
Unrealized losses on securities		(102,492	)		–			(103,057	)		(205,549	)	D,E,F	Changes in debt instruments measured at fair value through other comprehensive income
Unrealized losses on derivative instruments		1,513			–			(1,462	)		51			Cash flow hedges
Debt valuation adjustments		(3,120	)		–			-			(3,120	)		Insurance contract valuation adjustments
Foreign currency translation adjustments		106,826			(798	)		9,293			115,321			Exchange differences on translating foreign operations
		–			798			-			798			Share of other comprehensive income of  investments accounted for using the equity method
		15,692			–			48,191			63,883			Total other comprehensive income, net of tax
Total comprehensive income		1,207,067			–			(99,288	)		1,107,779			Comprehensive income
														Comprehensive income attributable to
Comprehensive income attributable to Sony Group Corporation’s stockholders		1,198,836			–			(80,208	)		1,118,628			Sony Group Corporation’s stockholders
Comprehensive income attributable to noncontrolling interests		8,231			–			(19,080	)		(10,849	)		Noncontrolling interests

F-25

(4)  Notes to reconciliation

	Reclassifications
a.	“Marketable securities”, which were separately presented under U.S. GAAP, have been reclassified into “Investments and advances in the Financial Services segment” as current assets under IFRS.  Investments held for variable annuities and variable life insurance contracts in the life insurance business, which were included in “Marketable securities” under U.S. GAAP, have been reclassified into “Investments and advances in the Financial Services segment” as current assets or non-current assets under IFRS, after considering the current/non-current distinction based on the purpose of the investments related to the insurance liabilities in accordance with paragraph 66 of IAS 1 “Presentation of Financial Statements” (“IAS 1”).
b.	“Notes and accounts receivable, trade and contract assets” and “Allowance for credit losses”, which were separately presented under U.S. GAAP, have been reclassified into “Trade and other receivables, and contract assets” under IFRS.
c.	“Other receivables”, which were separately presented under U.S. GAAP, have been reclassified into “Trade and other receivables, and contract assets” under IFRS.
d.	“Other financial assets”, which were included in “Prepaid expenses and other current assets” under U.S. GAAP, are separately presented under IFRS.
e.	“Film costs”, which were presented separately, and music catalogs, artist contracts, music distribution rights and other content assets, which were included in “Intangibles, net” under U.S. GAAP are collectively reclassified and presented as “Content assets” under IFRS.  “Intangibles, net” other than those reclassified and presented as “Content assets” have been reclassified into “Other intangible assets” under IFRS.
f.	“Securities investments and other”, which were separately presented under U.S. GAAP, have been reclassified into “Investments and advances in the Financial Services segment” as non-current assets for the amounts related to the Financial Services segment and “Other financial assets” as non-current assets for the amounts related to all segments excluding the Financial Services segment under IFRS.  Housing loans in the banking business, which were included in “Securities investments and other” under U.S. GAAP, have been reclassified into “Investments and advances in the Financial Services segment” as current assets or non-current assets under IFRS after considering the current/non-current distinction based on the terms of the contract in accordance with paragraph 66 of IAS 1.
g.	“Operating lease right-of-use assets” and “Finance lease right-of-use assets”, which were separately presented under U.S. GAAP, have been reclassified into “Right-of-use assets” under IFRS.
h.	“Other financial assets”, which were included in “Other” in other assets under U.S. GAAP, are separately presented under IFRS.
i.	“Current portion of long-term operating lease liabilities” and “Long-term operating lease liabilities”, which were separately presented under U.S. GAAP, have been reclassified into “Current portion of long-term debt” and “Long-term debt”, respectively under IFRS.
j.	“Notes and accounts payable, trade”, which were separately presented under U.S. GAAP, have been reclassified into “Trade and other payables” under IFRS.
k.	“Accounts payable, other and accrued expenses”, which were separately presented under U.S. GAAP, have been reclassified into either “Trade and other payables”, “Participation and residual liabilities in the Pictures segment”, “Other financial liabilities” or “Other current liabilities” under IFRS.
l.	“Deposits from customers in the banking business”, which were separately presented under U.S. GAAP, have been reclassified into “Other financial liabilities” of non-current liabilities under IFRS, after considering the current/non-current distinction based on the terms of the contract in accordance with paragraph 69 of IAS 1.
m.	“Trade and other payables” and “Other financial liabilities”, which were included in current liabilities “Other” under U.S. GAAP, are separately presented under IFRS.
n.	“Participation and residual liabilities in the Pictures segment” and “Other financial liabilities”, which were included in “Other” in other than current liabilities under U.S. GAAP, are separately presented under IFRS.
o.	“Redeemable noncontrolling interest”, which was separately presented under U.S. GAAP, has been reclassified into “Other financial liabilities” under IFRS.
p.	Under U.S. GAAP, securities received as collateral other than cash in lending transactions are accounted for as “Marketable securities” and also as “Other current liabilities” representing Sony’s obligation to return the collateral, which was 373,274 million yen as of March 31, 2021.  Under IFRS, the securities received as collateral other than cash shall be recognized in the consolidated statements of financial position if they are sold or the transferor defaults.  None of the securities was recognized in the consolidated statements of financial position as of March 31, 2021.
q.	“Other operating revenue”, which was separately presented under U.S. GAAP, has been reclassified into “Sales” under IFRS.
r.	Under IFRS, “Financial services revenue” and “Financial services expenses” have increased by the same amount due to the gross up of revenue and expenses related to service transactions, based on the presentation requirements.
s.	Under IFRS, “Financial income” and “Financial expenses” have been presented separately, based on the presentation requirements.

F-26

Recognition and measurement differences

A.  Exchange differences on translating foreign operations

　　Under IFRS 1, first-time adopters may choose to deem the cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS.  Sony has chosen to apply this exemption and transferred all cumulative exchange differences on translating foreign operations into retained earnings at the date of transition to IFRS.

　　The impact of this change is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Accumulated other comprehensive income		(509,872	)		(509,539	)		(510,091	)
Adjustment to retained earnings		(509,872	)		(509,539	)		(510,091	)

B.  Post-employment benefits

　　Under U.S. GAAP, past service costs and actuarial gains and losses are deferred in accumulated other comprehensive income, and subsequently reclassified to profit or loss over a certain period of time in the future.

　　Under IFRS, past service costs are expensed as incurred.  Adjustments due to remeasurements of the net defined benefit liabilities or assets, such as actuarial gains and losses, are recognized in other comprehensive income when incurred and immediately transferred to retained earnings and are not reclassified to profit or loss in a subsequent period.

　　In addition, if the fair value of plan assets is in excess of the present value of defined benefit obligations, the amount of any asset to be recognized is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.

　　The impact of this change before considering the tax effect is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Other non-current assets		(16,829	)		(11,826	)		(17,083	)
Defined benefit liabilities		30			(2,355	)		(62	)
Accumulated other comprehensive income		(300,385	)		(301,131	)		(277,379	)
Adjustment to retained earnings		(317,184	)		(315,312	)		(294,524	)

	Yen in millions
	Three months ended June 30, 2020			Fiscal year ended March 31, 2021
(Consolidated Statements of Income)
Cost of sales		–			(2,193	)
Selling, general and administrative		(397	)		(244	)
Financial expenses		2,288			9,476
Increase (decrease) in adjustment to pre-tax income		1,891			7,039

F-27

C.  Impairment of goodwill

　　The level at which goodwill is tested for impairment differs between U.S. GAAP and IFRS.  Under U.S. GAAP, goodwill is tested for impairment at the reporting unit level.  Reporting units are Sony’s operating segments or one level below the operating segments.  The identification of reporting units is dependent on the level at which discrete financial information is available and regularly reviewed by the segment manager.  Under IFRS, goodwill is tested for impairment at the level of the cash-generating unit (“CGU”) or group of CGUs, which represent the lowest level at which goodwill is monitored for internal management purposes, which may be a lower level of grouping than a reporting unit under U.S. GAAP.  A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets.

　　Upon the transition to IFRS, Sony assessed its reporting units to determine if such reporting units should be further divided into several CGUs under IFRS.  As a result, Sony determined that certain CGUs should be grouped at a lower level than a reporting unit under U.S. GAAP.  In addition, Sony performed an impairment test for goodwill at the date of transition to IFRS regardless of whether there were any indications that the goodwill may be impaired based on conditions at the date of transition to IFRS.  In performing the impairment test, Sony used the goodwill balance under U.S. GAAP attributed to each CGU or group of CGUs based on the history of acquisitions of the businesses.  Under U.S. GAAP, when a business within a reporting unit was disposed of (including when classified as held for sale), goodwill was allocated to the remaining business and the disposed business based on relative fair value, and only the goodwill allocated to the disposed business was written off.  Under IFRS, since certain disposed businesses represented individual CGUs or a group of CGUs, at the time of disposition, all the goodwill that was recognized for such businesses would have been written off.  The assessment resulted in impairments related to CGUs or groups of CGUs of the businesses that Sony disposed of prior to the date of transition to IFRS.  In addition, the assessment resulted in impairments related to CGUs or groups of CGUs of the businesses that existed at the date of transition to IFRS where the recoverable amount was lower than the carrying amount.

　　As a result, at the date of transition to IFRS (April 1, 2020), goodwill decreased by 96,817 million yen, and retained earnings decreased by the same amount.  The impact of this change was primarily in the I&SS and Pictures segments and is discussed below.

　　In the I&SS segment, at the date of transition to IFRS, Sony recognized 43,376 million yen of impairment losses in retained earnings, which includes the impairment loss related to the goodwill allocated to CGUs or groups of CGUs of the businesses that Sony disposed of prior to the date of transition to IFRS as well as the Internet of Things (“IoT”)-related business which existed at the date of transition to IFRS.  The recoverable amount of the IoT-related business was determined by the value in use and a pre-tax discount rate of 9.8% was used in the measurement.

　　In the Pictures segment, at the date of transition to IFRS, Sony recognized 48,749 million yen of impairment losses in retained earnings, which includes the impairment loss related to the goodwill allocated to CGUs or groups of CGUs of the businesses that Sony disposed of prior to the date of transition to IFRS as well as the United States television network CGU which existed at the date of transition to IFRS.  The recoverable amount of the United States television network CGU was determined by the value in use and a pre-tax discount rate of 15.9% was used in the measurement.

　　The impact of this change is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Goodwill		(96,817	)		(96,368	)		(100,727	)
Accumulated other comprehensive income		–			(449	)		2,942
Adjustment to retained earnings		(96,817	)		(96,817	)		(97,785	)

	Yen in millions
	Three months ended June 30, 2020		Fiscal year ended March 31, 2021
(Consolidated Statements of Income)
Other operating (income) expense, net		–		(968	)
Increase (decrease) in adjustment to pre-tax income		–		(968	)

F-28

The carrying amount of goodwill by segment is as follows:

	Yen in millions
	April 1, 2020		March 31, 2021
Game & Network Services *1		170,974		172,360
Music *2		391,325		408,424
Pictures *3		103,626		120,083
Electronics Products & Solutions		11,354		11,533
Imaging & Sensing Solutions		2,816		2,875
Financial Services		10,834		10,834
Total		690,929		726,109

*1 Game & Network Services (“G&NS”)

All of the goodwill shown in the G&NS line of the table above relates to the PlayStation® business.  Goodwill related to the CGU has a carrying amount of 170,974 million yen and 172,360 million yen, as of April 1, 2020 and March 31, 2021, respectively.  Intangible assets with indefinite useful lives related to the PlayStation® business have a carrying amount of 57,397 million yen and 57,449 million yen, as of April 1, 2020 and March 31, 2021, respectively, which are included in “Other intangible assets”.  Intangible assets with indefinite useful lives include the trademark for PlayStation®, which is assessed to have an indefinite useful life as the trademark for PlayStation® is utilized as the core trademark for Sony’s products and services throughout the G&NS segment and Sony expects to continue using the trademark in the future as well.  The recoverable amount of the CGU is determined by the value in use.  The value in use is calculated by discounting the estimated future cash flows including a terminal value.  The estimated future cash flows are prepared based on a three-year forecasted period derived from the mid-range plan (“MRP”).  A perpetual growth rate is utilized to determine a terminal cash flow value and is set after the final year of the forecasted period.  The growth rate and the pre-tax discount rate are 1.5% and 9.8% as of April 1, 2020 and 1.5% and 8.7% as of March 31, 2021, respectively.

*2 Music

Goodwill shown in the Music line of the table above is primarily allocated to the worldwide recorded music and music publishing CGUs excluding operations in Japan.

Goodwill related to the worldwide recorded music CGU has a carrying amount of 128,918 million yen and 136,572 million yen, as of April 1, 2020 and March 31, 2021, respectively.  The recoverable amount of the CGU is determined by the value in use.  The value in use is calculated by discounting the estimated future cash flows including a terminal value.  The estimated future cash flows are prepared based on a three-year forecasted period derived from the MRP.  A perpetual growth rate is utilized to determine a terminal cash flow value and is set after the final year of the forecasted period.  The growth rate and the pre-tax discount rate are 1.0% and 9.2% as of April 1, 2020 and 1.0% and 9.3% as of March 31, 2021, respectively.

Goodwill related to the music publishing CGU has a carrying amount of 238,684 million yen and 248,130 million yen, as of April 1, 2020 and March 31, 2021, respectively.  The recoverable amount of the CGU is determined by the value in use.  The value in use is calculated by discounting the estimated future cash flows including a terminal value.  The estimated future cash flows are prepared based on a three-year forecasted period derived from the MRP.  A perpetual growth rate is utilized to determine a terminal cash flow value and is set after the final year of the forecasted period.  The growth rate and the pre-tax discount rate are 2.5% and 8.4% as of April 1, 2020 and 2.5% and 8.2% as of March 31, 2021, respectively.

*3 Pictures

Goodwill shown in the Pictures line of the table above is primarily allocated to the United States television network CGU.  Goodwill related to the CGU is recognized with the carrying amounts of 54,156 million yen and 55,092 million yen, as of April 1, 2020 and March 31, 2021, respectively.  The recoverable amount of the CGU is determined by the value in use.  The value in use is calculated by discounting the estimated future cash flows including a terminal value.  The estimated future cash flows are prepared based on a three-year forecasted period derived from the MRP.  The terminal value is based on an earnings multiple applied to the final year of the forecasted earnings.  The growth rate beyond the MRP period and the pre-tax discount rate are 1.0% and 15.9% as of April 1, 2020 and 1.0% and 14.7% as of March 31, 2021, respectively.

F-29

　　The value in use calculation uses key assumptions such as the pre-tax discount rate, perpetual growth rate, competitive and regulatory environment, and technology trends.  For each assumption, historical experience, external information, competitors and industry trends are taken into account.  Sony does not expect the recoverable amounts to be lower than the carrying amounts even when the growth rate and pre-tax discount rate that are used in the evaluation of the recoverable amounts change within a reasonably predictable range.

D.  Equity instruments and debt instruments

　　Under U.S. GAAP, equity securities are recognized at fair value and subsequent changes in fair value are recognized in profit or loss.  Equity securities that do not have readily determinable fair values are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

　　Additionally, under U.S. GAAP, debt securities that are held-to-maturity, primarily in the life insurance business, are carried at amortized cost.

　　Under IFRS, equity instruments are recognized at fair value and subsequent changes in fair value are recognized in profit or loss.  However, for investments in equity instruments which are not held for trading, Sony may make an irrevocable election at initial recognition to present subsequent changes in fair value of the investments in other comprehensive income.  Such financial assets are measured at fair value and subsequent changes in the fair value are recognized in other comprehensive income.

　　Additionally, under IFRS, debt instruments, which are primarily in the life insurance business, are classified as financial assets measured at fair value through other comprehensive income if the debt instruments are held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.  Changes in the fair value of the financial assets after initial recognition, except for impairment gains or losses and foreign exchange gains or losses, are recognized in other comprehensive income.

　　The impact of this change before considering the tax effect is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Other financial assets (non-current)		22,110			30,233			31,627
Investments and advances in the Financial Services segment　 (non-current)		2,439,946			2,093,082			1,649,660
Accumulated other comprehensive income		(2,424,510	)		(2,142,662	)		(1,840,980	)
Adjustment to retained earnings		37,546			(19,347	)		(159,693	)

	Yen in millions
	Three months ended June 30, 2020			Fiscal year ended March 31, 2021
(Consolidated Statements of Income)
Financial services revenue		(13,558	)		(12,547	)
Financial services expenses		-			(854	)
Share of profit (loss) of investments accounted for using the equity method		3			(30	)
Financial income		(43,578	)		(178,677	)
Increase (decrease) in adjustment to pre-tax income		(57,133	)		(192,108	)

F-30

E.  Insurance-related accounts

　　In accordance with Sony’s first-time adoption of IFRS 4 “Insurance Contracts” at the date of transition to IFRS, insurance contracts are recognized and measured based on the same accounting principles previously applied under U.S. GAAP.  Under IFRS, the amount of insurance-related accounts was affected by shadow accounting in the life insurance business as a result of the increase in financial instruments to be measured at fair value through other comprehensive income.  This change is mainly because the shadow liability adequacy test indicated that the insurance liabilities were not recorded at a sufficient level at the date of transition to IFRS and as of June 30, 2020.

　　The impact of this change before considering the tax effect is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Deferred insurance acquisition costs		(412,997	)		(396,690	)		(33,434	)
Future insurance policy benefits and other		(273,530	)		(3,728	)		(14,609	)
Policyholders’ account in the life insurance business		2,261			2,318			2,170
Accumulated other comprehensive income		684,266			398,100			45,873

F.  Impact of changes in the measurement method of debt instruments in the life insurance business on deferred tax liabilities and noncontrolling interests

　　In connection with “D. Equity instruments and debt instruments” and “E. Insurance-related accounts”, accumulated other comprehensive income is affected due to the change in the measurement method of debt instruments in the life insurance business and the change in the amount of insurance-related accounts as a result of the application of shadow accounting.

　　The impact of this change on deferred tax liabilities and noncontrolling interests is as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
(Consolidated Statements of Financial Position)
Deferred tax liabilities		(489,839	)		(475,603	)		(452,189	)
Noncontrolling interests		(440,099	)		(427,309	)		–
Accumulated other comprehensive income		929,938			902,912			452,189

G.  Retained earnings

Main items of the differences on retained earnings are as follows:

	Yen in millions
	April 1, 2020			June 30, 2020			March 31, 2021
Retained earnings under U.S. GAAP		2,765,187			2,997,579			3,857,152
1  Exchange differences on translating foreign operations *A		(509,872	)		(509,539	)		(510,091	)
2  Post-employment benefits *B		(317,184	)		(315,312	)		(294,524	)
3  Impairment of goodwill *C		(96,817	)		(96,817	)		(97,785	)
4  Equity instruments and debt instruments*D		37,546			(19,347	)		(159,693	)
5  Other		6,616			(18,446	)		13,249
Tax effect of adjustments		64,221			74,046			106,195
Total		(815,490	)		(885,415	)		(942,649	)
Retained earnings under IFRS		1,949,697			2,112,164			2,914,503

F-31

H.  Income before income taxes

 Main items of the differences on income before income taxes are as follows:

	Yen in millions
	Three months ended June 30, 2020			Fiscal year ended March 31, 2021
Income before income taxes under U.S. GAAP		319,919			1,192,370
1  Post-employment benefits *B		1,891			7,039
2  Impairment of goodwill *C		–			(968	)
3  Equity instruments and debt instruments *D		(57,133	)		(192,108	)
4  Other		3,885			(8,368	)
Total		(51,357	)		(194,405	)
Income before income taxes under IFRS		268,562			997,965

I.  Income taxes

　　  Due to the adoption of IFRS, income taxes have been adjusted by recording the tax effects on various IFRS adjustments recognized and measured, and other IFRS tax effects.

(5)  Reconciliation of consolidated statements of cash flows

　　Main items of the differences on consolidated statements of cash flows are as follows:

	Yen in millions
	Three months ended June 30, 2020
	Cash flows from operating activities			Cash flows from investing activities			Cash flows from financing activities
Consolidated statements of cash flows under U.S. GAAP		126,185			(475,273	)		290,252
1.  Principal payments for operating lease liabilities*1		17,326			–			(17,326	)
2.  Additions and disposals of content assets*2		(4,816	)		4,816			–
3.  Changes in assets and liabilities in the Financial Services segment*3
(1)  Investments and advances in the Financial Services segment		(317,027	)		317,027			–
(2)  Deposits from customers in the banking business		116,676			–			(116,676	)
(3)  Borrowings in the life insurance business and the banking business		194,222			–			(194,222	)
(4)  Future insurance policy benefits and other and policyholders’ account in the life insurance business		29,789			–			(29,789	)
4.  Other		410			1,065			243
Total		36,580			322,908			(357,770	)
Consolidated statements of cash flows under IFRS		162,765			(152,365	)		(67,518	)

F-32

	Yen in millions
	Fiscal year ended March 31, 2021
	Cash flows from operating activities			Cash flows from investing activities			Cash flows from financing activities
Consolidated statements of cash flows under U.S. GAAP		1,350,150			(1,781,516	)		666,967
1.  Principal payments for operating lease liabilities*1		72,098			–			(72,098	)
2.  Additions and disposals of content assets*2		(34,751	)		34,751			–
3.  Changes in assets and liabilities in the Financial Services segment*3
(1)  Investments and advances in the Financial Services segment		(1,181,744	)		1,181,744			–
(2)  Deposits from customers in the banking business		332,987			–			(332,987	)
(3)  Borrowings in the life insurance business and the banking business		463,783			–			(463,783	)
(4)  Future insurance policy benefits and other and policyholders’ account in the life insurance business		134,299			–			(134,299	)
4.  Other		3,395			1,111			(2,333	)
Total		(209,933	)		1,217,606			(1,005,500	)
Consolidated statements of cash flows under IFRS		1,140,217			(563,910	)		(338,533	)

*1 The principal payments for operating lease liabilities

　　Under U.S. GAAP, lessees classify leases as either operating leases or finance leases, and the principal payments for the operating lease liabilities are classified as cash flows from operating activities in the consolidated statements of cash flows.  Under IFRS, the distinction between operating leases and finance leases no longer exists for lessees, and all of the principal payments for lease liabilities are classified as cash flows from financing activities in the consolidated statements of cash flows.

*2 The additions and disposals of content assets

　　Under U.S. GAAP, Sony classified the cash flows from the additions and disposals of film costs as cash flows from operating activities, and classified the cash flows from the additions and disposals of music catalogs, artist contracts, music distribution rights and other content assets as cash flows from investing activities in the consolidated statements of cash flows based on the nature of such transactions as additions and disposals of intangible assets.  Under IFRS, Sony defines these intangible assets as content assets, and classifies the cash flows from the additions and disposals of content assets as cash flows from operating activities in the consolidated statements of cash flows except for additions and disposals of content assets from business combinations or business divestitures, because the additions and disposals of content assets are derived from the principal revenue-producing activities of Sony.

*3 Changes in assets and liabilities in the Financial Services segment

　　Under U.S. GAAP, Sony classified cash flows from changes in investments and advances in the Financial Services segment and repurchase agreements in the Financial Services segment, deposits from customers in the banking business and policyholders’ account in the life insurance business according to the nature of these transactions in the consolidated statements of cash flows.  Under IFRS, Sony classifies cash flows from these transactions as cash flows from operating activities in the consolidated statements of cash flows as these transactions are viewed as integral to the principal revenue-producing activities of Sony.

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Outlook for the Fiscal Year Ending March 31, 2022

The forecast for consolidated results for the fiscal year ending March 31, 2022, as announced on April 28, 2021, has been revised as follows:

	(Billions of yen)
	March 31, 2021 Results		April Forecast		August Forecast		Change from April Forecast
Sales *1	¥	8,998.7	¥	9,700	¥	9,700		–	–
Operating income		955.3		930		980	+ ¥50 bil		+ 5.4	%
Income before income taxes		998.0		905		955	+ 50 bil		+ 5.6	%
Net income attributable to Sony Group Corporation’s stockholders		1,029.6		660		700	+ 40 bil		+ 6.1	%
For all segments excluding the Financial Services segment *2	March 31, 2021 Results		April Forecast		August Forecast		Change from April Forecast
Net cash provided by operating activities	¥	1,150.3	¥	910	¥	890	- ¥20 bil		- 2.2	%

*¹ “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).

*² Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS.  However, Sony believes that this disclosure may be useful information to investors.  Please refer to page F-11 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates are the following:

	Assumed foreign currency exchange rates for the nine months ending March 31, 2022	(For your reference) Assumed foreign currency exchange rates for the fiscal year ending March 31, 2022 at the time of the April forecast
1 U.S. dollar	approximately 110 yen	107 yen
1 Euro	approximately 131 yen	126 yen

Sales remain unchanged from the April forecast due to higher-than-expected sales in the Electronics Products & Solutions (“EP&S”) and Music segments, substantially offset by lower-than-expected sales in the Imaging & Sensing Solutions and Pictures segments.

Operating income is expected to be higher than the April forecast due to expected increases in operating income in the Music, EP&S and Pictures segments, as well as an expected decrease in operating loss in All Other, Corporate and elimination.

Income before income taxes is expected to be 955 billion yen, which is higher than the April forecast.  This expected increase is primarily due to the above-mentioned expected increase in operating income.

Net income attributable to Sony Group Corporation’s stockholders is expected to be higher than the April forecast mainly due to the above-mentioned expected increase in income before income taxes.

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The forecast for each business segment for the fiscal year ending March 31, 2022 has been revised as follows:

	(Billions of yen)
	March 31, 2021 Results			April Forecast			August Forecast
Game & Network Services (G&NS)
Sales	¥	2,656.3		¥	2,900		¥	2,900
Operating income		341.7			325			325
Music
Sales		939.9			990			1,040
Operating income		184.8			162			190
Pictures
Sales		753.0			1,140			1,120
Operating income		79.9			83			90
Electronics Products & Solutions (EP&S) *
Sales		2,068.1			2,260			2,320
Operating income		127.9			148			170
Imaging & Sensing Solutions (I&SS)
Sales		1,012.5			1,130			1,100
Operating income		145.9			140			140
Financial Services
Financial services revenue		1,674.0			1,400			1,400
Operating income		154.8			170			153
All Other, Corporate and elimination *
Operating loss		(79.6	)		(98	)		(88	)
Consolidated
Sales		8,998.7			9,700			9,700
Operating income		955.3			930			980

* Due to organizational changes as of April 1, 2021, from the first quarter of the fiscal year ending 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.  Sales and operating income (loss) of each segment for the fiscal year ended March 31, 2021 in the above chart are presented to conform to the organizational structure for the fiscal year ending March 31, 2022.

Game & Network Services (G&NS)

Sales and operating income are expected to remain unchanged from the April forecast.

Music

Sales are expected to be higher than the April forecast primarily due to stronger-than-expected sales from streaming services in Recorded Music and the impact of foreign exchange rates.  Operating income is expected to be higher than the April forecast primarily due to the impact of the above-mentioned expected increase in sales.

Pictures

Sales are expected to be lower than the April forecast primarily due to delays in some theatrical releases and deliveries of television episodes due in part to the impact of COVID-19.  Operating income is expected to be higher than the April forecast despite the aforementioned decrease in sales, primarily due to higher-than-expected television licensing sales from new film titles and catalog titles in Motion Pictures and catalog titles in Television Productions.

Electronics Products & Solutions (EP&S)

Sales are expected to be higher than the April forecast due to the impact of foreign exchange rates as well as higher-than-expected sales of digital cameras due to higher unit sales, partially offset by lower-than-expected sales of televisions due to lower unit sales.  Operating income is expected to be higher than the April forecast due to an increase in unit sales and an improvement in the product mix of digital cameras as well as the positive impact of foreign exchange rates, partially offset by the above-mentioned lower unit sales of televisions.

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Imaging & Sensing Solutions (I&SS)

Sales are expected to be lower than the April forecast due to an expected decrease in unit sales of image sensors for mobile products, partially offset by the impact of foreign exchange rates.  Operating income is expected to remain unchanged from the April forecast mainly due to the positive impact of foreign exchange rates, substantially offset by the above-mentioned decrease in sales of image sensors for mobile products.

Financial Services

Financial services revenue is expected to remain unchanged from the April forecast.  Operating income is expected to be lower than the April forecast primarily due to the recording of a one-time loss at a subsidiary of Sony Life Insurance Co., Ltd. (“Sony Life”).

The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future.  Accordingly, future market fluctuations could further impact the above forecast.

The above forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances.  Actual results may differ materially from those included in this forecast due to a variety of factors.  See “Cautionary Statement” below.

Notes about Financial Performance of the Music, Pictures and Financial Services segments

The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.

The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

The Financial Services segment results include Sony Financial Holdings Inc. (“SFH”) and SFH’s consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. The results discussed in the Financial Services segment differ from the results that SFH discloses separately on a Japanese statutory basis.

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Supplemental Information

The primary factors causing the differences between the sales and operating income (loss) recorded in accordance with U.S. GAAP and the sales and operating income (loss) recorded in accordance with IFRS for each business segment in the fiscal year ended March 31, 2021 are as follows:

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Cautionary Statement

Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Please note that Sony has disclosed the consolidated financial statements and its forecast for consolidated results for the fiscal year ending March 31, 2022 based on International Financial Reporting Standards (IFRS). Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:

(i) Sony’s ability to maintain product quality and customer satisfaction with its products and services;

(ii) Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing customer preferences;

(iii) Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;

(iv) the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives;

(v) changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility;

(vi) Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;

(vii) Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations;

(viii) the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending;

(ix) Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;

(x) Sony’s ability to forecast demands, manage timely procurement and control inventories;

(xi) foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets, liabilities and operating results are denominated;

(xii) Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;

(xiii) Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others;

(xiv) the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment;

(xv) shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;

(xvi) risks related to catastrophic disasters, pandemic disease or similar events;

(xvii) the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and

(xviii) the outcome of pending and/or future legal and/or regulatory proceedings.

Risks and uncertainties also include the impact of any future events with material adverse impact.  The continued impact of COVID-19

could heighten many of the risks and uncertainties noted above.  Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

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